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    Eveready Inds.

    EVEREADY
    Fast Moving Consumer Goods·6 Nov 2025
    Management Summary

    Eveready Industries India reported a 6.7% revenue growth and healthy 12.7% EBITDA margin in Q2 FY26, driven by strong performance in alkaline and carbon zinc batteries. However, the quarter saw a negative PAT of INR7.9 crore due to one-time ex-gratia payments and an arbitration settlement. The company successfully lifted the embargo on its capital structure management and continues to focus on distribution expansion and innovation, with the Jammu alkaline facility on track for FY26 completion.

    Highlights

    5
    • Revenue grew 6.7% in Q2 FY26, backed by stable gross margins.

    • EBITDA margin stood healthy at 12.7%, reflecting strong underlying operating performance.

    • Alkaline battery market share increased to 16.3% (from 15.3% in Q1) with over 60% growth.

    • Carbon zinc market share rose to 55%, maintaining leadership position.

    • Arbitration proceeding settled for INR15 crore, lifting embargo on capital structure management.

    Concerns

    4
    • PAT was negative INR7.9 crore due to one-time ex-gratia payment of INR22.7 crore and arbitration settlement of INR15 crore.

    • Temporary disruptions in the trade channel in September due to GST 2 reforms.

    • Moderation in flashlight momentum, with battery-operated segment seeing volume decline.

    • Persistent price compression in the LED category, impacting structural value.

    What Changed2

    vs Q3 FY26

    Guidance items8 → 5 (-3)Risks discussed5 → 4 (-1)

    Key financials

    Single quarter

    05 metrics
    1. 01Revenue Growth6.7%
    2. 02EBITDA Margin12.7%
    3. 03PAT₹-7.9 Cr
    4. 04A&P Spend10%
    5. 05Debt Equity Ratio0.7 ratio

    Segment breakdown

    Batteries
    16.3% Alkaline Market Share60% Alkaline Growth55% Carbon Zinc Market Share
    Flashlights
    10% Rechargeable Flashlights Growth-1% Battery-Operated Flashlights Volume Growth51% Rechargeable vs Battery-Operated Mix (H1)
    Lighting
    10.6% Total Revenue Growth
    List

    Capital allocation

    3
    medium confidence
    CategoryHeadline
    Capex

    Capex disclosed

    Debt

    Debt disclosed

    Liquidity

    Liquidity disclosed

    Strong balance sheet position and ability to fund growth internally.

    Guidance & targets

    5
    CategoryTargetPriority
    Revenue
    Revenue Growth
    6-7%
    Medium
    Profitability
    Operating Margin
    ~13%
    Medium
    Margin
    Alkaline Battery Gross Margin Parity with Carbon Zinc
    Parity
    Low
    Market Share
    Flashlight Market Share (Branded Players)
    Consolidation in favor of branded players
    Medium
    New Products/Categories
    Entry into new categories
    New categories
    Medium

    Jammu alkaline facility commissioning

    By financial year-end (FY26)
    CurrentOn schedule, under construction
    TargetCommercial operations

    Why it matters

    Key for alkaline battery volume growth, market share expansion, and potential margin improvement.

    Our Jammu greenfield facility, which remains on schedule for completion by end of FY '26 will provide a further fillip to the robust alkaline demand trajectory.

    How to verify

    capital_allocation.capex.purposes

    Risks & concerns

    4
    RiskSeverity

    Temporary disruptions from GST 2 reforms

    The trade channel witnessed some temporary disruptions in September due to the transition to new tax structures, though market sentiment picked up in October.Management acknowledged

    medium

    Input cost inflation (zinc, forex)

    Zinc prices showed firmness and forex rates were high, but managed through hedging, disciplined cost management, and optimized product mix to maintain operating margins.Management acknowledged

    medium

    Persistent price compression in LED category

    Structural value erosion in the LED category due to persistent price compression across the industry, addressed by product differentiation and efficiency.Management acknowledged

    medium

    CCI penalty

    Next hearing scheduled for November 19th/20th, with no quantification of liability from the company's side as of now.Analyst not addressed

    medium

    Q&A highlights

    8

    “So at this moment, it looks like for the next 2 quarters, we do not see anything coming up right now.”

    Clarifies that no further significant one-time ex-gratia payments are currently anticipated, impacting future profitability.

    asked by Arnav Sakhuja

    2 min read7 chapters

    Detailed Narrative

    01

    Q2 FY26 Performance Overview and One-Time Costs

    Eveready Industries India reported a 6.7% revenue growth in Q2 FY26, supported by stable gross margins across segments. The company achieved a healthy EBITDA margin of 12.7%, reflecting strong underlying operating performance. However, the quarter's PAT was negative INR7.9 crore, primarily due to one-time📎 expenses: an INR22.7 crore ex-gratia payment for worker separation and an INR15 crore charge for an arbitration settlement.

    02

    Battery Segment Drives Growth and Market Share Gains

    The battery segment demonstrated robust performance, with alkaline batteries gaining market share to 16.3% in Q2 FY26, an increase from 15.3% in Q1, and experiencing over 60% growth. Carbon zinc batteries maintained their leadership position with a 55% market share. The company's new Jammu greenfield facility for alkaline batteries, with a capacity of 360 million units, remains on schedule for completion by the end of FY26, poised to further boost alkaline demand and production.

    03

    Flashlight Segment Shifts Towards Rechargeable Formats

    The flashlight segment saw a moderation in overall momentum, primarily due to a volume decline in battery-operated flashlights. This reflects a natural shift in consumer preference towards rechargeable formats, which delivered double-digit growth. The company views this positively, aiming to consolidate its share in the fast-growing rechargeable segment. The upcoming mandatory BIS certification, effective January 2026, is expected to favor organized players and branded products.

    04

    Lighting Business Expansion Amidst Price Compression

    The LED lighting business recorded a 10.6% total revenue growth in Q2 FY26, driven by healthy volume growth across key subcategories. Eveready is also expanding into adjacent small electrical accessories, leveraging its brand. Despite persistent price compression across the industry, the company is focused on product differentiation, sourcing efficiency, and disciplined working capital management to maintain profitability.

    05

    Arbitration Settlement Lifts Capital Structure Embargo

    A significant development was the settlement of a long-drawn arbitration proceeding, resulting in a one-time📎 charge of INR15 crore. This settlement has effectively lifted the embargo on the company's ability to manage its own assets and capital structure. This newfound financial flexibility positions Eveready to pursue growth initiatives and potentially raise funds in the future if required.

    06

    Manufacturing Realignment and Cost Optimization

    Eveready undertook a strategic workforce restructuring, incurring an INR22.7 crore ex-gratia payment for the separation of 150 workers from its Noida facility and 10 from Kolkata. This initiative aims to realign manufacturing capacities and reduce inefficiencies, particularly in light of the upcoming Jammu alkaline facility. Management expects these actions to optimize the cost structure and yield future operational benefits.

    07

    Outlook and Strategic Growth Levers

    The company anticipates maintaining a 6-7% revenue growth trajectory and operating margins around 13% for the second half of FY26. Strategic levers include sharper channel segmentation, an innovation pipeline in flashlights and lighting, and disciplined working capital management. Eveready plans to push into other new categories within the next 12-18 months, leveraging its strong distribution network and brand equity.

    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.