It's been a tough year for Amritanshu Khaitan, executive director, Eveready Industries and son of vice-chairman Deepak Khaitan. Well ensconced in the company, Khaitan is now charting out a road map for a new Eveready that will offer a fresh range of products. Excerpts from an interview with Probal Basak and Ishita Ayan Dutt:
Is the portable charger launch your brainchild?
Somewhat. Once I did my MBA in LBS (London Business School), one of the bigger things that I learnt about emerging markets is that you do not have to come out with innovations. You have to see what is there in the world and bring it to India. For India, it is an innovation. This is one such innovation.
Is there any plan to tie up with smartphone or tablet manufactures to drive growth?
We are looking at various options. Except Nokia, no one has come out with this sort of product. We will definitely talk and look at these options. But at the moment, we are just test-marketing our products in five cities. These big decisions will start from April onwards. On Flipkart, we have sold 100 pieces in just two days, which is quite phenomenal.
Who is calling the shots at Eveready?
The final shot, obviously, is my grand dad (Brij Mohan Khaitan). He is still the chairman (non-executive). I brief my uncle (Aditya Khaitan) on whatever is happening. Major decisions are taken by the family, while the day-to-day running is done by me and Suvomoy Saha (executive director). The line of command is my father.
How has been your journey as executive director?
I joined the company last August, at a time when Eveready was going through one of its toughest times. By March-end, we had an Ebitda (earnings before interest, taxes, depreciation, and amortisation), which dropped from Rs 80 crore to about Rs 40 crore. So far as our stand-alone operation was concerned, we were in loss. Over and above that, we took a write-off of Rs 75 crore for Uniross. So we really hit the bottom.
But by this financial year-end, a part of the hard work will show results. At least, we will ensure a 40-50 per cent growth at Ebitda level. We have done a lot of restructuring in terms of product portfolio, trying to see how we can keep our cost down. Hopefully, the real benefit will come in 2013-14.
What are the cost cutting measures that were taken?
Generally, we are trying to keep our cost tight. But more than cost cutting, we need to get revenues to grow. I mean, our revenue has stagnated for the last three-four years when other FMCG (fast-moving consumer goods) companies have grown 15-20 per cent. So the first step is a seven-eight per cent growth. Next year, I will aim to get back to the double digit turnover growth. My first agenda is to get the sales growth back on track.
This is your short-term plan. What is the long-term vision for the company?
My vision is to extend products in the lighting and power areas. In the next three years, if we can carve out a four-five per cent share in the overall lighting industry with CFL, flashlight, lanterns, I could have a Rs 500 crore revenue from it. In batteries, we should have a complete solution for all type of batteries. These businesses put together, we should have in three years at least Rs 1,500 crore revenue. We have been between Rs 800 to 1,000 crore for the last five years. We will have to break out of this. The challenge for Eveready is that the new products do not fit the traditional distribution network. I am focusing at a parallel distribution network for lighting to get at least 100,000 outlets to sell electrical goods and a set of parallel distribution for chargers. This is going to be a big challenge for me. Once we have the distribution ready something like that of Bajaj or Havells, then sky is the limit.
I have identified the core in power and lighting and will extend the brand across these segments. When we talk about power, even car batteries come under that. But I do not have the resources at the moment to enter the car battery segment. Also, it is highly competitive. But, there can be various products. We have launched a radio for rural India. This is indigenously made. We got a supplier to make it for us.
So does it mean you can exit packet tea?
We have exited the coil business. But packet tea is there. Packet tea business has a steady Rs 100 crore turnover. We will diversify in FMCG only by acquiring readymade brands with certain value and profitability. But further diversification will happen when our balance sheet is debt-free. We have some surplus land in Noida and Hyderabad, but the real estate market is not that great. We have a debt of Rs 250 crore. To become debt-free the real estate market needs to revive.