Khaitan: Tough time

Calcutta, May 11: Eveready Industries has reported a loss of Rs 13.42 crore in 2006-07 compared with a profit of Rs 79.65 crore in 2005-06. This is the first time since 1995 that the company has suffered losses in its battery business.

Profit before tax of Rs 99.49 crore in 2005-06 included income of Rs 76.64 crore from sale of real estate.

In 2006-07, the proceeds from real estate deals were much lower at Rs 57.73 lakh. Net sales rose to Rs 772.52 crore from Rs 732.81 crore.

“Price of zinc, which makes up 65 per cent of our input, went up 150 per cent in the last fiscal. On the London Metal Exchange, the price of zinc has touched $4,089.50 per tonne. Total input costs increased between 45 and 50 per cent,” said Deepak Khaitan, vice-chairman and managing director of Eveready.

“Most of our consumers live in the rural and semi urban areas and are price sensitive. Sales volume of our D- size flashlight battery fell 25 per cent,” he added.

Low-cost LED Chinese torches have also flooded the market. These torches use the cheaper AA batteries.

Eveready sells around 120,000 units of its LED model Digilite per month. This is expected to go up further.

Eveready is looking at becoming a Rs-1500-crore company within the next three years.

The company hopes to earn 50 per cent of its revenues from the non-battery segment by 2010-11, Khaitan said.

Apart from mosquito coils, CFL lamps and packet tea, Eveready is on the look-out for other household items to expand its product range.