Prominent stock broker and businessman Utsav Parekh has joined the board of Eveready Industries Ltd (EIL) even as the largest shareholder of the company, the Burman family of Dabur, remains outside.
Parekh, who holds around 4.08 per cent stake in battery maker EIL, joined the board as a non-executive and non-independent director, along with Sourav Bhagat, a partner with solicitor firm Fox & Mandal, who came in as an independent director.
Sources said Parekh was approached by the EIL promoters, the Khaitan family, to join the board. “It is a long association I have with them (Khaitans). I was on the board of McLeod Russel and McNally Bharat earlier,” Parekh said this evening.
The board level changes took place at a time promoter holding in the company has slid below 5 per cent on the back of persistent sale of pledged shares. In contrast, the Burman family has around 20 per cent stake in the company but no board representation yet.
The Khaitans had borrowed heavily to save engineering firm McNally Bharat by keeping the EIL shares as collateral. When they defaulted in payment and the stock price tumbled, financiers sold the shares to cover their losses.
The board rejig also comes at a time Eveready is likely to record the highest profit in a year on the back of a strong demand for alkaline batteries, lower Chinese imports and benign raw material prices. The company’s net profit stood at Rs 50.43 crore in the third quarter compared with Rs 90.60 crore a year ago, which included exceptional gain from the sale of Chennai land for Rs 89.55 crore.
Amritanshu Khaitan, managing director of the company, noted that it has so far been the best nine months in the company’s history. “Our operating EBIDTA is at 20.1 per cent compared with 11.3 per cent during Q3 of last fiscal,” he said.
While the lighting business turned profitable this quarter, the appliances division halved losses. The solid operational performance along with the presence of the Burman family as the largest shareholder rubbed on the stock of EIL, which touched a 52-week high of Rs 245 on Wednesday before closing at Rs 240.30 on the BSE.
