Voltas face delays in collection of receivables

Management 'pessimistic' on current business environment

Voltas, the engineering products and services company, is facing delays in collection of receivables as business activities continue to stay muted in the current uncertain macro-economic environment. This has stretched the working capital cycle to more than 100 days, its management revealed at a recent meeting with analysts.

"We met Voltas' management to get a purview and update of its business. The working capital cycle for the company has increased recently on account of delays in collection of receivables. Historically, the company has been a debt free company as its business is not capital intensive. However, it stated that it may have some debt by the end of 2012-13 on account of increase in working capital and low levels of cash generation from its business," Bhavesh Chauhan and Vinay Rachh, analysts with Angel Broking, said.

Voltas' management is currently preparing a strategic business plan, which is expected to be finalised by March, 2013. This will outline its strategy till 2015 and will give a better understanding of the future direction of the company.

"Overall, the management sounded very pessimistic about the current business scenario as it does not see any major improvement in the near-term," the analysts said.

The company's order book currently stands at Rs 4,500 crore, which gives revenue visibility of 15 months.