Eveready Industries India Ltd has sold its tea processing unit at Jalpaiguri district of West Bengal for Rs 12 crore in the first quarter of FY14.

Amritangshu Khaitan, Eveready’s Whole-time Director, told Business Line the proceeds would be used to retire part of the company’s debt.

The processing work is now being outsourced for its packet tea business.

The company on Friday reported net sales of Rs 279.57 crore, up nine per cent from comparable quarter of FY13. Its profit before tax stood at Rs 8.10 crore (Rs 4.19 crore), up 93.3 per cent.

Its biggest drags on profitability, the interest, came down to Rs 8.94 crore from Rs 10.05 crore.

However, the mark-to-market exchange fluctuation cost during the quarter at Rs 3.24 crore (Rs 1.34 crore) moved up the total finance cost (including servicing of ECB and buyers credit).

Depreciation expenses went up for addition of amortisation of intangible asset (Eveready brand value).

This is because the revaluation reserve, created in 2004-05, got exhausted last fiscal and amortisation could not be adjusted against it.

Also because of deferred tax adjustment the Q1 net profit showed a modest growth of 23 per cent and stood at Rs 4.12 crore (Rs 3.35 crore). The two main product segments — batteries and flashlights — as also cost control measures were behind the growth in sales and realisation.

Khaitan said the turnover growth in FY14 could be around 15 per cent and the contribution of new products could be markedly higher.

The company shares shot up 2.71 per cent to close at Rs 18.95 on the BSE on Friday.

jayanta.mallick@thehindu.co.in

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