Increased earnings from its cement business helped Kesoram Industries reduce its loss to Rs 10.81 crore during the quarter ended June 30, 2019 (Q1FY20) even as its tyre business continueed to remain under stress thereby pulling down the company’s overall performance.
During the corresponding period of the last financial year, the company had posted a loss of Rs 113.68 crore.
On a comparative basis, the company’s revenue from operations remained flat at Rs 1,010.67 crore. It had posted a topline of Rs 1009.78 crore in Q1FY19.
Although its pre-tax profit from the cement business improved 163.84 per cent to Rs 145.51 crore, the loss from the tyre business widened to Rs 22.61 crore as against a loss of Rs 7.89 crore in the corresponding period of Q1FY19.
Despite a reduction in expenses of 10.03 per cent, the company's net loss stood at Rs 10.81 crore during the quarter under review.
Driven by increased cement volumes and good prices, along with rationalisation of costs, Kesoram had posted a net profit Rs 8.80 crore in Q4FY19 which made Kesoram Industries return to black after 10 quarters of losses.
Kesoram is in the process of demerging its tyres business into a separate identity under Birla Tyres to strengthen its tyres business and foray into the passenger car radial tyre vertical.
In a recent meeting of the company’s shareholders and secured, unsecured creditors the scheme was approved by the requisite shareholder majority and Kesoram Industries is in the process of filing a confirmation petition before the NCLT for grant of approval of the demerger scheme.
As on June 30, 2019, the tyres division had assets worth Rs 1,830.13 crore with liabilities of Rs 752.66 crore, while the cement division had assets worth Rs 1891.40 crore with a liability of Rs 808.10 crore.