July 1, 2020

Eveready Industries FY20 profit jumps over 3-fold to Rs 179.5 crore

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Eveready Industries India Ltd, a flagship company of B.M. Khaitan Group, reported over three-fold jump in its net profit at Rs 179.57 crore for the financial year 2019-20, compared to Rs 47.26 crore in the last fiscal. For the January-March quarter of FY20, the net profit surged multi fold to Rs 63.73 crore as against Rs 4.04 crore in Q4 FY19.

The profitability was aided by rise in gross margin in the core segments of batteries and flashlights and improvement in operating margin due to additional cost savings measures. The discontinuance of the packaged tea business further helped the company in improving margins and releasing working capital, Eveready Industries said in a regulatory filing.

The operating income of the battery maker, however, fell 17 per cent to Rs 1,210.93 crore in FY20 from Rs 1,457.73 crore in the full financial year 2018-19. For January-March quarter of FY20, operating income declined 28 per cent year-on-year to Rs 224.20 crore.

“The turnover for the quarter and the year was lower than that in the previous year as the segments of lighting and appliances were adversely impacted. Furthermore, discontinuance of the packet tea segment decreased turnover by Rs 40.4 crore during the year (Rs 18.7 crore during the quarter),” Eveready Industries said in a filing to the Bombay Stock Exchange.

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The company said that all its business segments, including batteries and flashlights, got adversely impacted as optimal sales could not be achieved in March 2020 due to the countrywide lockdown imposed to contain the COVID crisis. Due to this disruption alone, the company’s turnover during the month was lower by around Rs 60 crore.

EBITDA (Earnings before Interest, Tax, Depreciation and Amortisation) fell 1 per  cent YoY to Rs 121.13 crore in FY20, while it jumped 139 per cent YoY to Rs 28.67 crore in Q4 FY20. The EBITDA margin stood at 10 per cent in FY20 versus 8.4 per cent in FY19. For Q4 FY20, margin rose to 12.8 per cent to 3.8 per cent in Q4 FY19.

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On COVID-19 crisis, Eveready Industries said that its lighting business has been adversely impacted by supply constraints. “The situation is likely to improve in the forthcoming quarters as new suppliers are developed. Furthermore, once normalcy is restored in the supply chain, the company would be able to augment its turnover through its various channels of distribution,” it said.

Going forward, the company expects situation in the battery segment to improve due to sharp decrease in dumped imports from China and the disruptions caused to the unorganised market due to non-availability of supplies.

The company informed that its board has not recommended dividend for the financial year ended March 31, 2020.

In a separate development, the battery manufacturer said that Aditya Khaitan, Vice Chairman, has been designated as the chairman of the company.

Ahead of earnings announcement, shares of Eveready Industries ended Wednesday’s trade at Rs 86.85, up 6.63 per cent, against previous closing price of Rs 81.45 on the BSE.



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