"Opportunities are more outside India," said Deepak Khaitan, vice-chairman, Eveready Industries, said here on Friday, while announcing the company's Q1 results. He didn't provide details of investment or the product, but said it would possibly manufacture and distribute the product in India, relying on the huge Eveready distribution network. "We should have more clarity by the end of the second quarter on this," he said.
Khaitan also said the company was contemplating buying a quality product from group company McLeod Russell, the world's largest tea producer, to enhance Eveready's packet tea portfolio. The packet tea business of Eveready is worth Rs 150 crore and "is making a small profit".
He said the coils business was putting pressure on margins. "I have given the team a year to grow from Rs 25 crore to Rs 50 crore. If they fail, we will have to take a decision."
Profit after tax for the quarter April to June was marginally down at Rs 15 crore from last year's Rs 16 crore with net sales almost flat at Rs 238 crore (Rs 233 crore last year in the same period). Khaitan said PAT was slightly lower on two accounts: the company had to provide quarter ending accounting charges of Rs 4 crore (nil last Q1) for marking to market of open zinc hedging positions; the company also had no comparable income from sale of real estate in the current quarter (Rs 3.90 crore in last Q1).
But Khaitan said sales were down because the monsoon was erratic in key states like UP, Bihar. "We are having a good July, we should be on par by August if the rains come," he added.