Detailed Narrative
Q3 FY26 Performance Overview
Eveready Industries India Ltd. achieved its fifth consecutive quarter of revenue growth in Q3 FY26, with revenue increasing by 10.1% and EBITDA by 13%. The demand environment was mixed but gradually stabilizing, characterized by selective urban consumption and relatively stable rural demand, supported by post-monsoon cash flows and festive season spillovers. The company's core portfolio strength and execution measures contributed to this momentum.
Batteries Business: Key Growth Driver
The batteries business continued to be the primary growth driver, growing 11.1% in Q3 FY26. The company maintained a strong overall value share of 51.9%, with zinc batteries holding a 58.3% share. The alkaline portfolio demonstrated robust growth of approximately 72%, with its volume share reaching almost 19% by December '25, aided by increasing usage of power-intensive devices. Distribution reach expanded by 3% YoY, now covering 4.7 million retail outlets.
Input Cost Management and Margin Impact
The quarter saw renewed volatility in global commodity markets, with elevated zinc prices and a strengthened U.S. dollar leading to input cost pressures. This resulted in a 150 basis points year-on-year fall in gross margins, as cost increases outpaced calibrated price adjustments. Management employed effective hedging and disciplined cost controls to mitigate the impact, expecting neutralization of the margin dip in coming periods.
Jammu Alkaline Manufacturing Facility Progress
Progress on the Jammu alkaline battery facility is on track for completion by the end of the current fiscal year, with an investment of INR 167 crores. This facility, the first of its kind in India for alkaline batteries, is expected to improve segment margins by almost 10% and achieve breakeven from day one. Initial capacity utilization is projected at 25-30%, aiming for 40-50% within two years, with potential for white-label manufacturing for global markets.
Strategic Divestment and Debt Reduction
The Board approved the divestment of a non-core land parcel at Noida, a strategic move to enhance financial flexibility and reduce debt. The minimum price for this divestment is set at INR 250 crores, with monetization expected within the next six months. This action contributed to the reduction of net debt to INR 317 crores during the quarter, while net working capital was maintained at less than 15% of revenue.
Lighting Business and New Product Initiatives
The Lighting business showed a gradual recovery, growing 10.5% in value, driven by strong underlying volume growth. The company focused on portfolio upgradation, with a higher mix of value-accretive SKUs like high volt LED bulbs and accessories. New product launches included mosquito rackets, mobile accessories, and the patented Hybrid rechargeable flashlight, contributing to diversification and future growth.