Kolkata, Feb 20
Eveready Industries India Ltd, which has witnessed close to 170 basis points jump in market share in its core batteries business during the third quarter of this fiscal over the preceding quarter, is expecting to revert to a “higher level of growth” in the near term backed by its move to “contemporise” distribution and premiumisation of product portfolio.
According to Suvamoy Saha, Managing Director, Eveready, the battery market remained flat during the third quarter, reflecting sluggishness in demand, particularly in the rural markets. However, the company managed to grow by close to nine per cent, which was primarily due to premiumisation.
“Eveready has made notable progress in focusing on core strengths and tapping into niche underserved segments. The tempo of activity is visible and every product launch is backed by commensurate activation. Consumers are taking notice and this is evident from the gains we have made in market share in our core business of batteries, where the brand is synonymous with the segment. Our market share in batteries jumped 170 bps over the preceding quarter to stand at 54.5 per cent, the highest level as per that one can see in the past,” Saha said in the earnings conference call transcript.
Q3 revenues
For the quarter ended December 31, 2022, the company’s revenues from operations grew by nearly 5 per cent at ₹330 crore, ignoring the discontinued business of appliances. For the 9-month period, the revenue from operations grew by nearly 12 per cent for continuing businesses. This was on the back of premiumization of product portfolio, combined with steady realization (of) gains, which was further aided by focused marketing campaign around communication and investment in branding and promotion. Batteries account for nearly 67 per cent of the company’s total turnover, flashlight for about 10 per cent and lighting for around 21 per cent.
The company is hopeful of clocking a higher growth in fourth quarter and the subsequent quarters thereafter. “We hope to end the year, higher than our current year-to-date growth of 12 per cent. In the foreseeable future, we should be able to push that up to a mid-to late teen level of growth,” he said.
Contemporising distribution
Eveready, Saha said, has undertaken a new drive to contemporize the distribution and make it more efficient through a new route-to-market (RTM) initiative. In order to implement the new RTM successfully, the company consciously moderated the growth targets for the quarter.
With the RTM implementation now close to completion, the company is hopeful of reverting to the higher level of growth in the foreseeable future. In the battery market, the company is under indexed in some geographies as well as in certain other segments, which provides it with headroom to grow despite its strong position in the market.
Within flashlight, the battery-operated segment was showing decline, though at a lower rate of around 10 per cent.
“We are grossly under indexed in the fast-growing market of rechargeable flashlights as the company did not address this market earlier. From the time we recognized this area as the major good driving opportunity, we have made good progress with building an adequate portfolio of products. Our product launches during the quarter found enthusiastic traction in the market. This segment, which is primarily comprised of unorganized, unbranded products, will continue to be an area of interest for growth and building to a leadership position. Simultaneously, we are stepping up our efforts in the battery-operated category as well so that the portfolio remains contemporary,” he pointed out.
On the lighting business, the company is coming up with an extensive line up of products, effectively making use of growing presence of the brand in the electrical outlets channel. Eveready lighting products have the dual advantage of being available extensively across the general trade channel and now also in the electrical shops. It is making good inroads across smaller towns and cities, and at the same time, honing its plans to tap into the larger metro locations and modern trade revenues more deeply.