Cavendish sale helps Kesoram post profit in Q1

The company's balance sheet adjusted Rs 94.70 cr as an exceptional item due to the Cavendish deal

Sale of Cavendish division to JK Tyres in April this year helped Kesoram Industries post a result in the green as the company reported a net profit of Rs. 9.49 crore for the period ended June 30, 2016.

The company's net loss in the similar months of the last fiscal year stood at 164.74 crore, which was mainly incurred on account of finance costs and an over capacity in the tyres business.

The company's balance sheet adjusted Rs 94.70 crore as an exceptional item (income) arising out of the transfer of the ownership of Cavendish to the JK Tyre Group in the first fortnight of April 2016 after adjusting Rs 71.29 crore of estimated expenses related to the transfer.

In the last quarter of 2015-16, the company had posted Rs 755.35 crore as the exceptional item (income) for the same reason which rocketed its net profit to Rs 720.33 crore.

Mainly on account of the exit from the rayons business and a subdued demand for cement and tyres, Kesoram's net income for the period under review declined by nine percent at Rs. 975.77 crore as against Rs. 1072.72 crore earned during the April-June period of 2015-16.

However, it was able to bring down its expenses which shrunk by 6.6 per cent at Rs. 996.87 crore.

Under subdued demand conditions, the income from both the cement and tyre division fell.

Against an earning of Rs. 531.33 crore during the first quarter of 2015-16, it reported an income of 465.85 crore in the tyre segment while the income from cement dipped by 5.5 per cent at Rs. 509.50 crore.