Eveready Industries' shares soared five percent on the Bombay Stock Exchange (BSE) after the company reported a reduction in its losses in the fourth quarter to Rs 2.1 crore from Rs 86 crore in the year-ago period and increased net sales of Rs 227.5 crore from Rs 221 crore year-on-year.
Amritanshu Khaitan, executive director, Eveready India told CNBC-TV18, "We had guided for our turnover to be around Rs 1,000-1,050 crore in FY13. We are quite confident that we should deliver 10-15 percent turnover growth in FY14." He added that the earnings before interest, taxes, depriciation, and amortisation (EBITDA) would grow 30-40 percent in FY14.
Speaking on their sales, he said that the company's battery and flashlight volumes would grow at 7-8 percent in FY14. He said that they had a target to bring down the debt from Rs 200 crore from Rs 270 crore.
Below is the edited script of his interview to CNBC-TV18.
Q: You did reach your target of crossing Rs 1,000 crore in sales. But on that base now in FY14, what can you achieve in terms of revenues this year you think?
A: We had guided for our turnover to be around Rs 1,000-1,050 crore in FY13. Taking from here, we are quite confident that we should deliver 10-15 percent turnover growth in FY14. So anywhere between Rs 1,150-1,200 crore should be reached quite comfortably.
Q: What about the bottom line? You have just about managed to get back into the black this year as was your target. Can you build on that in terms of margins and delivering a slightly fatter profit this year?
A: If you look at the earnings before interest, taxes, depreciation and amortization (EBITDA) growth this year, we have had 30 percent EBITDA growth taking our EBITDA from Rs 58 crore to Rs 74 crore.
We announced a price increase in our AA batteries a month back which is now being implemented. So if things go according to plan, I think we should expand our EBITDA by another 100 basis points and with a turnover at about Rs 1,150-1,200 crore, we should continue a healthy growth at EBITDA level by about 30-40 percent. Down to the bottom-line, with interest cost going down for us this year with better operational results and a debt repayment which has been planned, I think we should have a better bottomline number this year.
Q: What does this 10-15 percent growth imply in terms of growth you expect to see on the batteries and flashlight divisions?
A: 10-15 percent value growth would be split in our three categories. The battery and flashlight should see a seven-eight percent growth because of the price increase and the volume growth which we expect this year. The new categories we have entered should add another five percent growth in the overall turnover.
Q: You do have board approval in terms of divesting some of your assets related to your tea estate, etc. How soon do you want to do that? Have you valued what that stands at and what could potentially come to you by way of cash?
A: The board approval is actually for packing factories, not tea estate. All our tea estates are in our sister company McLeod Russel. This is just a packing factory which we are taking approval for.
Hopefully by July we should conclude a transaction on this. The money we expect is between Rs 10-20 crore and that should go straight to repay our debt. As I have said earlier, our target to bring down Eveready's debt this year from Rs 270 crore is to bring it to Rs 200 crore. So this money would also go to repay part of the debt.