Eveready eyes 10% growth in GST era

Eveready Industries India is eyeing a 10-15 per cent growth in the ongoing financial year on hopes it would be able to increase its market share in batteries and flashlights segment post the goods and services tax (GST) roll-out. It also expects to grow its small appliances and LED businesses.

Managing Director Amritanshu Khaitan is of the opinion that as a result of stricter compliance norms, the unorganised batteries and flashlights market would shrink and, thus, Eveready, which is the market leader in both the categories, would gain.

Its flashlights business vertical, which contributes 14 per cent to the company’s annual turnover, commands a 75 per cent market share in the organised space, while its mainstay, dry cell batteries division, which accounts for 57 per cent of the annual earnings, has a 50 per cent market share.

“So long, the unorganised players weren’t paying any taxes as a result of which the prices of lower-quality Chinese imports were cheaper. Now, under the GST regime, these importers will have to either pay taxes or stop imports,” he said. Sources say the importers, to claim input tax credit, will now have to channelise their sales via formal trade channels, which will make these Chinese imports costlier. “Thus, we stand to gain from GST from the second half of the ongoing financial year,” Khaitan said.

It is estimated that 10-12 per cent of the total dry cell battery market in the country comprises of imported batteries, while 35 per cent of flashlights market are import dependent.

However, sales of batteries and flashlights, in tune with other FMCG products, are poised to remain muted till the second quarter of the 2017-18 financial year, as trade and distribution channels will take time to fall in line with the GST norms and requisites.

The company is also stepping up the gas on the small appliances and LED business by introducing new products and foraying aggressively into the business-to-business and government business besides retail sales.