Any current/future new fundraising through debt or equity?

The company plans a Rs. 180 crore investment to set up an alkaline battery plant with 360 million units capacity. Funding for this investment will be partly through internal accruals and largely through borrowed funds to avail possible interest benefits. No specific mention of new equity fundraising was noted. Current net debt stands around Rs. 260 crore with an average borrowing cost of 8.7%. No other explicit plans for fresh debt or equity fundraising were discussed in the provided transcript.

Any current/future capex/capital investment/strategic investment?

The company has approved a capital investment of Rs. 180 crore to set up an alkaline battery manufacturing plant with a capacity of 360 million units. Currently, alkaline batteries are imported and only repacked in India; this will be the first alkaline facility in the country for the company. The investment aims to gradually scale production from the current throughput of 60 million units to higher utilization in 3-4 years. The asset turnover is expected to reach 1:1 around the third year of operation. Funding for the investment will be partly internal and partly borrowed, considering potenti

Future growth expectations in sales/revenue/volumes?

**Battery Segment:** - Expecting mid-single-digit growth in volume. - Alkaline battery market growing at ~20% CAGR; ready to tap this with new 360 million capacity plant. - Carbon zinc segment stagnant; focus shifting to premium alkaline products. - Alkaline to drive double-digit growth in the coming years. **Flashlight Segment:** - Anticipated double-digit growth, specifically 10-15% growth outlook. - Focus on rechargeable flashlights and innovative products to regain market share. **Lighting Segment:** - Wide growth potential; targeting breakeven at Rs. 400 crore turnover and

Future growth expectations in earnings/operating earnings/profits/EPS?

**Battery Segment Growth:** Mid-single-digit growth expected; alkaline battery segment growing at ~20% with investment in a 360 million unit capacity plant. **Flashlight Segment:** Double-digit growth targeted, aiming for 10-15% growth; focusing on premium, battery-operated flashlights. **Lighting Business:** Wide growth potential; aiming to cross Rs. 400 crore turnover to achieve break-even; targeting mid to high growth in next 2-3 years. **Operating Margins:** Targeting sustained double-digit operating margins; current Q1 EBITDA margin is 14.2%, expected to improve beyond last year's 10.7%.

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Eveready Industries India LtdQ2 FY24Household Products

Eveready Industries India Ltd Q2 FY24 Earnings Call Analysis

Revenue, margin, capex, fundraise and order book outlook from management commentary.

Price: ₹369P/E: 15.9Market Cap: ₹2.3K CrSector: Household Products

Management growth scorecard

Revenue

Category 3

Margin

Category 3

Fundraise

Yes

Order

N/A

Capex

Yes

2 of 4 growth signals are positive.

Full analysis

Revenue guidance

Category 3

→**Battery Segment:**
→ - Expecting mid-single-digit growth in volume.
→ - Alkaline battery market growing at ~20% CAGR; ready to tap this with new 360 million capacity plant.
→ - Carbon zinc segment stagnant; focus shifting to premium alkaline products.
→ - Alkaline to drive double-digit growth in the coming years.
→**Flashlight Segment:**
→ - Anticipated double-digit growth, specifically 10-15% growth outlook.
→ - Focus on rechargeable flashlights and innovative products to regain market share.
→**Lighting Segment:**
→ - Wide growth potential; targeting breakeven at Rs. 400 crore turnover and moving towards profitability.
→ - Recently achieved positive EBITDA.
→**Additional Initiatives:**
→ - Exploring new categories (fourth category) in 4-6 quarters for further growth.
→ - Expanding alternative sales channels (modern retail, e-commerce) for increased market reach.

Margin guidance

Category 3

→**Battery Segment Growth:** Mid-single-digit growth expected; alkaline battery segment growing at ~20% with investment in a 360 million unit capacity plant.
→**Flashlight Segment:** Double-digit growth targeted, aiming for 10-15% growth; focusing on premium, battery-operated flashlights.
→**Lighting Business:** Wide growth potential; aiming to cross Rs. 400 crore turnover to achieve break-even; targeting mid to high growth in next 2-3 years.
→**Operating Margins:** Targeting sustained double-digit operating margins; current Q1 EBITDA margin is 14.2%, expected to improve beyond last year's 10.7%.
→**Premiumization & Product Mix:** Focus on premium products like alkaline batteries and battery-operated flashlights to improve revenue and margins.
→**Investment and Payback:** Rs. 180 crore investment in alkaline battery plant with a 5-6 year payback period.
→**New Category:** Considering launch of a fourth product category within 4-6 quarters for additional growth.

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Fundraise plans

Yes

→The company plans a Rs. 180 crore investment to set up an alkaline battery plant with 360 million units capacity.
→Funding for this investment will be partly through internal accruals and largely through borrowed funds to avail possible interest benefits.
→No specific mention of new equity fundraising was noted.
→Current net debt stands around Rs. 260 crore with an average borrowing cost of 8.7%.
→No other explicit plans for fresh debt or equity fundraising were discussed in the provided transcript.

Order book

- The transcript does not explicitly mention current or expected order book or pending orders. - However, the company is focusing on growth in batteries (mid-single-digit), flashlights (double-digit), and lighting segments. - The Board has approved a Rs. 180 crore investment in a new alkaline battery plant with 360 million capacity, indicating planned capacity expansion. - The company sees strong potential in flashlights and alkaline batteries, with believed momentum in these segments. - New product launches and expanded offerings in rechargeable categories are underway. - There is a plan to introduce a fourth product category within 4 to 6 quarters, reflecting future order growth potential. - Management aims for double-digit operating margins and sustained growth, suggesting confidence in future order inflows. No specific numeric order book or pending orders details are disclosed in this call.

Capex plans

Yes

→The company has approved a capital investment of Rs. 180 crore to set up an alkaline battery manufacturing plant with a capacity of 360 million units.
→Currently, alkaline batteries are imported and only repacked in India; this will be the first alkaline facility in the country for the company.
→The investment aims to gradually scale production from the current throughput of 60 million units to higher utilization in 3-4 years.
→The asset turnover is expected to reach 1:1 around the third year of operation.
→Funding for the investment will be partly internal and partly borrowed, considering potential interest benefits.
→There is also consideration for exploring a fourth product category within 4 to 6 quarters, though work on this has not yet started.
→Ongoing initiatives include modernizing go-to-market processes and expanding distribution channels beyond general trade to boost growth.

How does Eveready Industries India Ltd rank vs peers in Household Products?

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