Eveready Inds. Q1 FY24 Earnings Call Analysis
Revenue, margin, capex, fundraise and order book outlook from management commentary.
Management growth scorecard
Revenue
Category 3
Margin
Category 3
Fundraise
N/A
Order
N/A
Capex
Yes
1 of 3 growth signals are positive — mixed outlook.
Full analysisRevenue guidance
Category 3- Battery segment volume growth expected to be flat to slow single-digit growth; value premiumization underway (Page 12).
- Overall revenue growth guidance sustained with double-digit growth anticipated from next year due to transformation initiatives and new product categories like rechargeable flashlights and lighting (Pages 11-12).
- Flashlight segment aiming for double-digit growth; recent slight delay attributed to late monsoon onset but market remains buoyant and largely unbranded aside from Eveready (Page 13).
- Lighting segment recorded 20% growth this quarter with expectation of continued growth; current breakeven revenue in lighting is INR350-400 crore (Pages 7-8).
- Overall company revenue growth in Q1 FY24 was 8.3%, with positive outlook to maintain or improve this trajectory going forward (Pages 3-4).
- General anticipation of stable to improving margins with improved gross margins and controlled A&P spends (Pages 6-7).
See what Eveready Inds. management said on margin guidance — free account, 30 seconds.
Fundraise plans
- The transcript does not mention any immediate plans for new fundraising through equity or debt.
- There is ongoing litigation that is impacting the company’s ability to raise equity currently.
- Mithun Aswath asked about the litigation affecting equity raising, and the management indicated that hearings are pending in early 2024 with no definitive timeline yet.
- The company is focusing on stabilizing operations and growing organically through route-to-market improvements and product portfolio expansion.
- Existing debt stands at around INR340 crore with a weighted average cost of 8.5%, and the company is managing repayments regularly.
- Management expects improving margins and growth driven by business performance rather than new significant fundraising events in the immediate future.
See what Eveready Inds. management said on order book — free account, 30 seconds.
Capex plans
Yes- The company is in an investment phase for the current year, focusing on transformation and route-to-market (RTM) initiatives.
- Bain Capital was engaged for efficiency improvements and growth strategy, with INR 25-26 crore spent over 18 months ending June.
- The RTM transformation work is nearing completion this quarter.
- Advertising and promotional (A&P) expenses are elevated (around 7.5%-10% of sales) during this investment year, expected to normalize to 7-8% next year.
- Employee costs are anticipated to stabilize around 9-10% of revenue going forward.
- No specific new capex figures detailed, but ongoing investments aim to stabilize distribution and support accelerated growth.
- Lighting business expansion includes building a robust product portfolio and increasing outlet reach.
- The company is also expanding in rechargeable flashlights and LED lighting segments as strategic growth areas.
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