Summary
Eveready Industries India Limited - Q3 FY26 Earnings Call Summary Friday, February 06, 2026 4:00 PM IST
Event Participants
Executives Anirban Banerjee – Chief Executive Officer, Anirban Ghosh – General Manager Finance and Head of Investor Relations, Bibek Agarwala – Executive Director and Chief Financial Officer
Analysts Arnav Sakhuja (Ambit Capital), Bhargav (Ambit Asset Management), Krish Mehta (Enam Holdings), Mehul Savla (RW Equities), Priyank Chheda (Vallum Capital), Ravi Kapoor (Sahani Advisory), Saket Kapoor (Kapoor & Company), Vikas Srivastav (Individual Investor), Vipul Shah (RW Equities)
Financials & KPIs
| Metric | Reported | Commentary |
|---|---|---|
| Revenue | ₹400+ crores (Est.) | +10.1% YoY; Represents fifth consecutive quarter of revenue growth despite selective urban consumption. |
| EBITDA | Not disclosed | +13.0% YoY; Growth driven by core battery performance and cost management despite commodity volatility. |
| Gross Margin | Not disclosed | -150 bps YoY; Impacted by higher zinc prices and USD strengthening; partly mitigated by price hikes. |
| Net Debt | ₹317 crores | Reduced from prior levels despite ₹167 crore investment in Jammu facility; Net working capital held below 15% of revenue. |
| Ad & Marketing | ₹41 crores | Mixture of ATL and BTL initiatives; focused on brand salience and new product adoption. |
| Zinc Battery Share | 58.3% | Core volume remained stable, benefiting from rural recovery and deep distribution reach. |
| Alkaline Volume Share | 19.0% | Significant trajectory growth from near zero; Ultima brand sub-segment grew 72% YoY. |
| Total Battery Volume | ~1 billion units | +4.5% YTD volume growth across Carbon Zinc and Alkaline portfolios. |
Geographic & Segment Commentary
- Batteries: The segment grew 11.1% in Q3, anchored by the premium “Ultima” alkaline range which saw 72% growth. Carbon zinc volumes remained stable due to rural demand, while overall value market share was maintained at 51.9%.
- Flashlights: Experienced overall softness due to moderation in battery-operated formats. However, rechargeable flashlights now comprise over 50% of the portfolio; management expects formalization gains following mandatory BIS certification.
- Lighting: Revenue grew 10.5% in value, driven by strong underlying volume growth in the LED category. Focus remains on value-accretive SKUs like high-volt LED bulbs and professional luminaires to counter structural price pressures.
Company-Specific & Strategic Commentary
- Jammu Alkaline Facility: The ₹180 crore facility is on track for completion by FY26 end; it is expected to improve alkaline margins by ~10% by replacing imports with domestic manufacturing.
- Asset Monetization: The Board approved the divestment of a non-core land parcel in Noida with a minimum valuation target of ₹250 crores, aimed at debt reduction.
- Product Innovation: Launched “Ultima” Lithium AA/AAA batteries (15x longer life) and filed a first-ever patent for the “Hybrid” rechargeable flashlight.
- Distribution Reach: Direct presence expanded to 4.7 million retail outlets, a 3% YoY increase, supporting the “Route to Market” (RTM) strategy.
Guidance & Outlook
| Metric | Guidance / Outlook | Commentary |
|---|---|---|
| Capacity Utilization | 25-30% in Year 1 | Target for the new Jammu Alkaline plant (350 million unit capacity) starting Q1 FY27. |
| Debt Reduction | Significant | Proceeds from the Noida land sale (Expected ₹250 cr+) to be primarily used for deleveraging. |
| Margin Profile | Stabilizing | Management expects price hikes and local manufacturing to offset current zinc/currency headwinds in the medium term. |
| Asset Monetization | 6-month window | Management aims to conclude the Noida land sale within the next two quarters. |
Risks & Constraints
| Risk | Context |
|---|---|
| Commodity Volatility | Sustained high zinc prices and a strong USD continue to pressure gross margins, requiring further calibrated price increases. |
| Regulatory Delays | Incentives for the Jammu plant remain in “status quo”; registration under the national incentive scheme is still pending approval. |
| Competitive Intensity | The LED lighting segment remains structurally competitive with persistent price erosion, necessitating a shift toward professional lighting. |
Q&A Highlights
Core Growth & Margins
- Question: What caused the 150 bps fall in gross margins? (Arnav Sakhuja)
- Answer: Cost increases in zinc and the USD outpaced price increases during the period; management views this as seasonal and offset by premiumization (Bibek Agarwala).
Jammu Plant Economics
- Question: When will the Jammu facility breakeven? (Bhargav)
- Answer: Expectation of breakeven from Day 1 due to 10% better operating margins compared to imports. The plant will also explore white-labeling for export markets (Bibek Agarwala/Anirban Banerjee).
Asset Monetization
- Question: What is the expected value of the Noida land sale? (Vikas Srivastav)
- Answer: The Board has set a minimum mandate of ₹250 crores based on independent valuations (Bibek Agarwala).
Market Share & Channels
- Question: What is the contribution of Quick Commerce? (Krish Mehta)
- Answer: E-commerce contributes 4-5% of total revenue, but 55% of that channel’s business is now driven by Quick Commerce (Anirban Banerjee).
Key Takeaway
Eveready Industries delivered a resilient Q3 FY26, marking its fifth consecutive quarter of revenue growth (+10.1%) and EBITDA expansion (+13.0%) despite a 150 bps compression in gross margins due to zinc price volatility. Strategy is centered on premiumization, evidenced by the 72% growth in the “Ultima” alkaline range and a 19% volume share in that segment. The upcoming Jammu alkaline facility (350 million unit capacity) is a structural catalyst expected to boost segment margins by 10% upon its Q1 FY27 commissioning. With net debt at ₹317 crores, the planned ₹250 crore Noida land monetization provides a clear path to a near debt-free balance sheet. While commodity headwinds persist, the company’s transition from a negative-growth decade to steady double-digit momentum suggests it is well-positioned to leverage its 4.7 million outlet reach for new categories like mobile accessories and professional lighting.
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