Backed by increased cement volumes and good prices together with rationalisation of costs, Kesoram Industries posted a net profit Rs 8.8 crore for the quarter ended March 31, 2019. This is the first time the company posted a post tax profit after 10 quarters of losses.
In the fourth quarter (Q4) of the 2017-18 fiscal year, the company posted a net loss of Rs. 160.17 crore.
Although its revenue from sales increased by 5.20 per cent at Rs. 1036.58 crore during the quarter under review, costs came down by 9.98 per cent at Rs. 1060.50 crore. A credit of current tax charge of Rs 11.95 crore and other income helped the company post a net tax.
“Our cost efficiencies are paying off and there has been several rationalisation like selling both cement as well as tyres at a 250 km radius. Also the price increase in cement and increased revenue from this segment owing to higher sales volume helped us post a net profit,” P Radhakrishnan, the company’s chief financial officer said.
Although Radhakrishnan did not provide absolute sales volume figures, he claimed that on a year-on-year basis, sales volume in the Q4 period of the last fiscal year jumped by 13-14 per cent.
The dip in the tyre business, where revenue slipped by 32.07 per cent to Rs 253.30 crore, was offset by the cement vertical, where revenue was up 27.96 per cent to Rs 783.28 crore.
Radhakrishnan said that during the 2017-18 to 2018-19 fiscal year, this flagship firm of the B K Birla Group of companies, was able to reduce its debt by Rs 500 crore to Rs 2,950 crore.
Currently, Kesoram Industries is looking at strengthening its tyre manufacturing business by demerging it and exploring entry into the passenger car radial segment. The demerger is awaiting SEBI approval.
In March this year, Kumar Mangalam Birla, chairman of the Aditya Birla group, wrote to Sebi seeking reclassification from a promoter to a public shareholder in this company.