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    Eveready Inds.

    EVEREADY
    Fast Moving Consumer Goods·6 Aug 2025
    Management Summary

    Eveready Industries reported a 7% revenue growth in Q1 FY26, driven by strong battery and flashlight performance, while maintaining a 14.3% EBITDA profile. The company saw significant market share gains in alkaline batteries and resolved a long-standing arbitration. However, the lighting segment faced price erosion, and an exceptional charge was incurred for employee restructuring.

    Highlights

    6

    • Overall revenue growth of 7% in Q1 FY26, driven by strong trends in batteries and flashlights.

    • EBITDA profile maintained at 14.3%, aligning well with the company's intent.

    • Alkaline market share increased by 50 bps quarter-on-quarter to 15.3% due to performance-led positioning and advertising campaigns.

    • Carbon-zinc category holds a dominant 59.1% market share, supported by extensive distribution and brand equity.

    • Rechargeable flashlights segment grew by 39% year-on-year, contributing to double-digit growth in the overall flashlight category.

    • Settlement agreement with Real Touch Finance Limited resolves the KKR-related arbitration, leading to the lifting of restrictions on asset disposal and capital restructuring.

    Concerns

    4

    • Exceptional charge of Rs. 7.07 crore incurred towards non-recurring ex-gratia payments to workmen as part of a separation exercise.

    • Lighting segment revenue remained flat, navigating a challenging environment marked by continuing price erosion despite volume expansion.

    • Discretionary purchasing remained subdued and rural demand showed a slow recovery during the quarter.

    • Battery-operated flashlights saw marginally negative performance in both volume and value terms.

    What Changed1

    vs Q2 FY26

    Risks discussed4 → 5 (+1)

    Key financials

    Single quarter

    04 metrics
    1. 01Overall Revenue Growth7.0%
    2. 02EBITDA Profile14.3%
    3. 03Exceptional Charge₹7.07 Cr
    4. 04Other Income₹2.4 Cr

    Segment breakdown

    Batteries
    50% Revenue Growth50% Volume Growth15.3% Alkaline Market Share59.1% Carbon-Zinc Market Share19% Margin
    Flashlights
    double-digit growth Overall Growth39% Rechargeable Growthmarginally negative trend Battery-operated Volume/Value13% Margin
    Lighting
    flat trend Revenuegrowth across SKUs trend Volumeflat trend Margin
    List

    Capital allocation

    4
    high confidence
    CategoryHeadline
    Capex

    Capex disclosed

    Debt

    Gross ₹200 crores

    M&A

    Real Touch Finance Limited

    acquisition · closed · Consideration ₹NaN (cash)

    Liquidity

    Cash ₹0.02 crores

    Analyst mentioned cash balance of Rs. 2 lakhs and Rs. 48 lakhs in current account for FY25, implying low liquidity.

    Guidance & targets

    4
    CategoryTargetPriority
    Capex
    Alkaline Plant Commercial Production
    by March 2026
    		High
    Revenue
    Overall Turnover
    Rs. 1800 crore
    		Medium
    Profitability
    EBITDA Profile
    14.3%
    		High
    Cost Efficiency
    Annual Cost Savings from Layoffs
    Rs. 4 crore
    		High

    Clarity on Asset Monetization

    by end of another couple of quarters
    CurrentManagement stated it's 'still a little raw' and 'will be the next question of what to do next'.
    TargetSpecific plans or timeline for monetizing surplus assets.

    Why it matters

    Unlocking value from surplus assets could significantly boost the company's financial position and fund future growth.

    The next step would be maybe by end of another couple of quarters, there would be clarity on this.

    How to verify

    capital_allocation.m_and_a

    Risks & concerns

    5
    RiskSeverity

    Subdued Discretionary Purchasing

    Consumer demand held on with urban consumption steady, but discretionary purchasing remained subdued. — Management acknowledged

    medium

    Slow Rural Demand Recovery

    Rural demand showed a slow recovery during the quarter. — Management acknowledged

    medium

    Lighting Segment Price Erosion

    LED lighting navigated a challenging environment marked by continuing price erosion, muting value growth despite volume expansion. — Management acknowledged

    medium

    Zinc Price Volatility

    Zinc prices stayed range-bound, but the company exercises cautious hedging to protect profitability. — Management acknowledged

    low

    Competitive Market for New Products (MCBs/Wires)

    The MCB and wire market is highly competitive, and traction is being observed. — Management acknowledged

    medium

    Q&A highlights

    8

    “Vikas ji, you know, this settlement happened just, what, one week back. It is still a little raw. It has to sink in because the first attempt was obviously to, you know, it was a commercial thing that we needed to get out of this embargo, which we have done. As we internalize this sort of get settled down to this, then will be the next question of what to do next in terms of, but respectfully, I think the figure is grossly overstated.”

    Analysts are keen on potential asset sales to unlock value, but management indicated it's too early to discuss specifics, though acknowledged surplus assets.

    asked by Vikas Srivastava

    2 min read5 chapters

    Detailed Narrative

    01

    Q1 FY26 Performance Overview

    Eveready Industries India Ltd. reported a 7% overall revenue growth in Q1 FY26, primarily driven by strong performance in its batteries and flashlights segments. The company successfully maintained a robust EBITDA profile at 14.3%, aligning with its strategic intent for profitable growth. An exceptional charge📎 of Rs. 7.07 crore was incurred during the quarter for non-recurring📎 ex-gratia payments to workmen, part of a separation exercise aimed at enhancing long-term cost efficiency.

    02

    Segmental Performance Highlights

    The batteries segment demonstrated strong growth, with alkaline market share increasing by 50 basis points quarter-on-quarter to 15.3%, supported by performance-led positioning and advertising. The carbon-zinc category maintained a dominant 59.1% market share. Flashlights achieved double-digit growth, led by a 39% year-on-year increase in rechargeable flashlights, while battery-operated flashlights saw a marginal decline. The lighting segment's revenue remained flat, facing a challenging environment of continuing price erosion despite achieving volume growth across various SKUs.

    03

    Strategic Initiatives and Outlook

    Eveready is on track with its greenfield alkaline battery manufacturing facility in Jammu, targeting commercial production by March 2026, with an internal goal of January 2026. This plant is expected to strengthen competitiveness and accelerate market share gains. The company continues to leverage its robust distribution system, completed last year, and is adding adjacent products like MCBs, which are currently outsourced but designed in-house. Management aims for high single-digit overall growth and believes achieving Rs. 1800 crore turnover within the next three years is 'imminently possible'.

    04

    KKR Settlement and Capital Allocation

    The company successfully settled its arbitration with Real Touch Finance Limited by paying Rs. 15 crore, resolving the long-standing KKR-related dispute. This settlement will lead to the lifting of restrictions on asset disposal and capital restructuring. While the total debt stands at Rs. 200 crore, including Rs. 115 crore for the alkaline plant, management indicated it's too early to discuss specific asset monetization plans, despite acknowledging surplus assets.

    05

    Operating Environment and Cost Management

    The operating environment in Q1 FY26 saw steady urban consumption but subdued discretionary purchasing and a slow recovery in rural demand. Inflation was moderate, and zinc prices remained range-bound, allowing the company to maintain gross margins through cautious hedging and product mix optimization. The employee separation exercise, incurring a Rs. 7.07 crore exceptional charge📎, is projected to yield annual cost savings of approximately Rs. 4 crore with a payback period of 3-4 years, enhancing long-term cost efficiency.

    This is an AI-generated summary of a publicly available earnings call transcript. It is for informational purposes only and does not constitute investment advice, a recommendation, or an endorsement. inve.money is not a SEBI-registered investment advisor. Please consult a qualified financial advisor before making any investment decisions.