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Please refer to important disclosures at the end of this report
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Eveready Industries India Limited (Eveready) is engaged in the business of
marketing of fast moving consumer goods (FMCG), such as dry cell batteries,
rechargeable batteries, flashlights, packet tea and general lighting products. The
company expects that all segments are expected to grow around 10-15% per
year. Recently the company announced that it has added new category named
air purifiers which management expects that may not contribute a lot to turnover
but it will help extend the brand as Eveready has been trying to reduce its
dependence on its mainstay battery business, that contributes `800crore or 60%,
to the firm’s top line. Eveready has strong balance sheet which makes it a safer
bet. The financials of the company are likely to further strengthen in the
upcoming quarters as it is now banking on its LED segment where they have
launched new products in the luminous space and is likely to make `250crore by
FY18E as per management guidance compared to the current level of
~`47crore, as more of it is expected to come from the retail brand than that of
government orders thus giving them the pricing benefit. Eveready’s lighting
business doubled from `150crore in FY14-15 to `300crore in FY16-17 and
management expects it to bring in to `500crore in the next two years. The
company has reported decrease in debt and increase in cash flow from
operation which is a positive sign for the company with Debt to equity being at
0.28x in FY16. Hence Buy.
BUY
CMP `320
0.7
Reuters Code
ERDY.BO
5
BSE Sensex
30,322
Nifty
9,445
Face Value (`)
Consumer Durable
Market Cap (` cr)
2,181
52 Week High / Low
328/190
Avg. Daily Volume
45,283
Vaibhav Agrawal
022 3935 7800 Ext: 6808
[email protected]gelbroking.com
Eveready Industries India
Others | Consumer Durable
May 16, 2017
2
Eveready Industries India | Consumer Durable
May 16, 2017
2
Research Team Tel: 022 - 39357800 E-mail: [email protected] Website: www.angelbroking.com
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Disclosure of Interest Statement Eveready Industries India
1. Financial interest of research analyst or Angel or his Associate or his relative No
2. Ownership of 1% or more of the stock by research analyst or Angel or associates or relatives No
3. Served as an officer, director or employee of the company covered under Research No
4. Broking relationship with company covered under Research No
Ratings (Based on expected returns Buy (> 15%) Accumulate (5% to 15%) Neutral (-5 to 5%)
over 12 months investment period): Reduce (-5% to -15%) Sell (< -15)