Eveready Industries has increased price of dry cell batteries by 2 percent after government rolled back the excise duty concession from January 1, 2015. Speaking to CNBC-TV18, ED Amritanshu Khaitan said the price hike in batteries has not affected the volumes of the company.
The dry cell batteries major has taken a hike of over 20 percent in batteries over the past 18 months. The company is eyeing a growth between 10-15 percent this fiscal.Below is verbatim transcript of the interview:
Q: Has the company passed on the entire burden of the excise duty hike, will there be any impact on the company's financials?
A: Yes, we have taken a price increase to offset this excise duty impact of 2 percent and this will neutralise the impact for the balance sheet as well as going forward, it would keep our profit margins intact.
Q: What is the cumulative price increase that you have taken now, year-to-date (YTD)?
A: It would be approximately between 5-10 percent across various batteries, but if you take 18-months period it would be closer to 25 percent.
Q: Any more (hikes) that you have planned going ahead?
A: We normally like to take a round of price increases just before the monsoon. So we will see during the month of March- April, where the raw material costs are, where the rupee is and then take a call whether we would need to take another round of price increases thereafter.
Q: On the back of so many price increases have you seen any dip in your volumes, has that impacted it at all? What are you hoping to end FY15 with, by way of volume a growth?
A: The price increases have not impacted volumes per se; the battery industry is seeing growth after many years due to increased demand and increased proliferation of gadgets consuming batteries.
The two main categories that include AA (Double A) and AAA (Triple A) are seeing growth between 5-7 percent for AA and between 10-15 percent for AAA. So, for us an overall growth rate of 4-5 percent should be there.
One reason why the organised players are not seeing the total benefit of the volume growth is because 4-5 percent of the market converted to cheap Chinese batteries and we are in the process of filing for an anti-dumping duty on cheap Chinese batteries as an association.
We are hopeful that if this comes through, then the battery growth rate for overall industry next year would be enjoyed by the organized players.
Q: What about the growth for your own business in terms of revenues? You said you will do about 10 to 15 percent by the end of this fiscal but by the end of next fiscal what kind of growth do you envisage?
A: This fiscal we should be anywhere between 10-15 percent as guided earlier but next fiscal the growth rate should accelerate to between 15-20 percent for the company.
The growth will be primarily driven by our focus in the lighting business where we are in the process of launching a range of LED products, which should add about a Rs 50-100 crore topline going forward in FY16.
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