Fundamental Analysis

EVEREADY INDUSTRIES (INDIA) LTD. 

Ticker : 531508
BUY : Rs 148.95
Target : Rs 165

Eveready Industries is the market leader in the batteries segment, commanding over 50 per cent of India's market share, and holding 75 per cent of India's organised flashlights market. On a consolidated quarterly front, the net sales fell by 20.47 per cent in Q1FY21 to Rs 263.44 crore from Rs 331.24 crore in Q1FY20. The company reported an operating profit of Rs 52.96 crore in Q1FY21, up by 62.05 per cent from Rs 32.68 crore reported in Q1FY20. Similarly, the net profit increased by 254.41 per cent from Rs 7.15 crore gained in Q1FY20 to Rs 25.33 crore gained in Q1FY21. A decrease in demand for cheap batteries from China as well as disruption in the supply chain of the unorganised market for flashlights is expected to boost the demand for the company's products. Additionally, with the upcoming festive season, demand for lighting products should see an uptrend thus, giving the company a positive outlook. Hence, we recommend a BUY.