Calcutta: The Williamson Magor group has set its sight on becoming the third-largest packet tea player in the country after the two top companies of the group come together to propel the business.

Alkaline battery maker Eveready Industries Ltd (EIL), which was so long operating the packet tea business, is setting up an equal joint venture with McLeod Russel, the world's largest bulk tea producer, aiming at a five-fold increase in sales in five years.

"We want to become the third-largest player. To reach that slot, the turnover should be around Rs 300-400 crore," Eveready's managing director Amritangshu Khaitan said.

Last year, the packet tea division of EIL earned Rs 80 crore, selling around 4,000 tonnes of tea. Tez was the top grossing brand of the company.

The joint venture will be done through Greendale India Ltd, which is now a wholly owned subsidiary of EIL.

McLeod will buy a 50 per cent stake in the company for Rs 20 crore, while Eveready will invest a similar amount. However, Eveready's transaction will be cash neutral on the balance sheet since it will get Rs 20 crore from Greendale for the transfer of brands.

The transaction related to the new entity was approved by the Eveready board on Friday, when it declared the second-quarter results.

The company reported a 41.93 per cent increase in net profit at Rs 36.35 crore for the September quarter compared with Rs 25.61 crore during the same period of the previous fiscal. Revenue from operations during the quarter stood at Rs 398.25 crore against Rs 366.63 crore in the July-September period of 2016-17. Battery volumes grew 7 per cent.

Khaitan said Greendale might look at inorganic growth in the future and both the companies could pump in money when required.