INDIA – Williamson Magor Group companies Eveready Industries India Ltd and McLeod Russel India Ltd on Friday announced they are to form a 50-50 joint venture to scale up Eveready’s packet tea business.
Evererady, the battery and flashlight maker, said in a statement that its packet tea business “was not receiving adequate attention and focus due to the company’s other priorities”.
The packet tea market in India is estimated at Rs10,000 crore, Eveready said.
The packet tea brands of the company and other related assets are to be transferred to Greendale India Ltd, the joint venture, for Rs20 crore, the company said.
McLeod Russel is one of the world’s largest tea plantation companies. It is envisaged that this arrangement will help develop the group’s packet tea business with the two firms combining their “respective skills of marketing and distribution and tea plantation knowledge”.
Meanwhile, Eveready on Friday said its September quarter net profit had jumped 42% year-on-year (y-o-y) to Rs36.35 crore from Rs25.62 crore in the same period last year as sales of all key product segments improved and operating margin expanded. Revenue grew 9% y-o-y to Rs398.25 crore.
McLeod Russel also announced its September quarter numbers on Friday, unveiling a net profit of Rs143.52 crore, up 8.6% from a year ago, helped by better price realization and better sales.
Revenue in the September quarter at Rs511.59 crore was up 2% y-o-y.
Shares of Eveready jumped Rs9.50 each, or 2.79%, to Rs350.55 on the BSE, while those of McLeod Russel closed almost unchanged at Rs167.25 in a flat market.