Dry Cells Sector Analysis: A Deep Dive Into Eveready Industries India Ltd.

This comprehensive analysis delves into the dry cells sector, with a particular focus on Eveready Industries India Ltd., leveraging extracted data from their Q2 and H1 FY26 investor documents and concall transcripts. The report synthesizes financial performance, market positioning, strategic initiatives, operational characteristics, growth drivers, risks, capital allocation, and future outlook to provide an in-depth understanding of the company and its operating environment within the dry cell and allied electrical categories. While the data primarily pertains to Eveready, insights into the broader industry are inferred from their market leadership and strategic discussions.

---

A. Industry Overview & Market Landscape

The dry cells sector in India, encompassing batteries, flashlights, and increasingly, adjacent electrical categories like LED lighting and small electrical accessories, presents a dynamic landscape characterized by evolving consumer preferences, technological shifts, and a strong emphasis on brand reliability and distribution reach. Eveready Industries India Ltd., a venerable player with a heritage dating back to 1905 (first sales) and founded in 1934, stands as a dominant force, particularly in the battery segment.

Total Addressable Market Size And Growth Rates

While specific aggregate market size figures for the entire dry cell industry in INR are not explicitly provided, Eveready's substantial market share offers a strong indication of the market's scale. Eveready, as India's No.1 BATTERY brand (Nielsen IQ Retail index Data for MAT Oct 2024), holds over 50% market share in India's battery segment and a 52.3% market share in dry cell batteries as of Q2 FY26. Given Eveready's H1 FY26 revenue from operations of INR 760.9 crores, the total dry cell battery market in India is estimated to be well over INR 1500 crores annually, purely based on Eveready's share. The company annually sells over 1.3 billion dry cell batteries, 18 million+ flashlights, and 34 million+ LED lights, underscoring the significant volume base of these product categories.

The market exhibits varied growth rates across its segments:

• Alkaline Batteries: This segment is experiencing robust growth, with Eveready reporting an upwards of 60% growth in both volume and value for Q2 FY26, and almost 50% plus growth over the last two years. This indicates a rapidly expanding sub-segment within the broader battery market, driven by the increasing prevalence of higher drain devices.
• Carbon Zinc Batteries: Despite the rise of alkaline, the carbon zinc portfolio sustained healthy growth in both value and volume terms in Q2 FY26, suggesting continued relevance in certain applications and price points.
• LED Lighting: The lighting space, while showing underlying volume gains across key subcategories (battens, panels, emergency lamps, luminaires), faces structural value erosion due to persistent price compression across the industry. Eveready's lighting segment grew by 10.6% YoY in Q2 FY26 and 3.2% YoY in H1 FY26, indicating moderate growth despite pricing pressures.
• Flashlights: Rechargeable flashlights delivered double-digit growth in Q2 FY26, benefiting from broader acceptance in modern trade and institutional channels. Battery-operated flashlights, however, showed lower traction with volume decline, indicating a shift in consumer preference.
• Newer Categories: Adjacent categories like mosquito rackets and small electrical accessories are scaling up fast, pointing to diversification opportunities and growth pockets.

Market Structure And Segmentation

The dry cell sector is broadly segmented by product type, technology, and application:

1. Batteries:

   • Carbon Zinc: The traditional and dominant segment, where Eveready holds a leadership position with close to 59% market share (Q2 FY26) and 55% volume traction. These are typically used in low-drain devices.
   • Alkaline: A premium and high-growth segment, catering to higher-drain devices. Eveready's market share in alkaline batteries has grown significantly from low single-digit to 16.3% in Q2 FY26, an increase of ~100 bps Q-o-Q from 15.3% in Q1 FY26. This segment is a key focus for future growth and margin expansion.
   • Rechargeable: While not explicitly detailed for batteries, the increasing demand for rechargeable flashlights suggests a broader trend towards rechargeable power solutions.

2. Flashlights:

   • Battery-operated: The traditional segment, facing lower traction and volume decline.
   • Rechargeable: A high-growth segment, offering durability and convenience, especially gaining traction in modern trade and institutional channels. Eveready's rechargeable flashlights delivered double-digit growth in Q2 FY26.