Eveready May Raise Battery Prices, Start New Products Sales
Eveready Industries Ltd., India’s biggest maker of batteries, plans to raise prices and sell new products to reverse four straight quarters of profit decline.
The company may raise tariff as early as December, Deepak Khaitan, managing director of the Kolkata-based company, said in an interview yesterday. Eveready also plans to start selling Uniross brand torches in a next year, he said.
Zinc futures have risen 26 percent in the past year on the London Metal Exchange, while India’s central bank has increased its policy rate 11 times since last year. The metal makes up 25 percent of the company’s total expenses. Net income plunged 96 percent in the quarter ended March, according to the company’s most recent earnings report.
“Battery is a very price-sensitive category but it will be beneficial for us to take a price hike as I can see cost pressure mounting,” said Khaitan. “More brands and products will help improve our profitability.” Prices of some products were raised as much as 9 percent last December, he said.
Eveready shares gained 4.3 percent to 44.85 rupees at the 3:30 p.m. close in Mumbai, the highest since May 20. They have declined 18 percent this year, exceeding a 14 percent drop in the BSE Small-Cap Index. (BSESMCAP)
The company bought 80 percent of France’s Uniross SA, according to a filing to Indian exchanges on May 14, 2009.
Eveready, which sells about 1.2 billion batteries a year, is investing 300 million rupees ($6.8 million) to expand capacity to make AA batteries by 19 percent, Khaitan said. AA batteries are used to power torches and television remotes.
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