The company had posted its first quarterly profit after about 10 quarters. Its
BK Birla Group flagship Kesoram Industries’ net debt for the financial year ended March 2019 declined by 24% to Rs 2,971.56 crore from Rs 3,903.78 crore a year ago, as the company cut both current and non-current borrowings during the period.
The company’s non-current borrowings in the last fiscal declined by over 4% year-on-year to `2,031.47 crore, while its current borrowings decreased by around 38% y-o-y at Rs 757.92 crore, according to its annual report for 2018-19. Kesoram’s cash and cash equivalents as on March 31, 2019, stood at `18.24 crore against `66.99 crore a year ago, the report said.
The company, which makes cement, tyre and rayon, has been looking to cut its massive debt for quite sometime in a bid to strengthen its balance sheet.
Notably, Kesoram’s board in December last year had approved the demerger of the company’s tyre business into a separate firm, Birla Tyres Limited (BLT), for opening new “growth vistas” for the new entity by attracting fresh investment and technology.
The company believes finding a strategic partner for the tyre business would gather steam after the proposed demerger.
The stock exchanges have accorded in principle approval to the scheme. Accordingly, the company has filed the scheme with the Kolkata Bench of the National Company Law Tribunal (NCLT). “The scheme will be effective upon receipt of approvals as may be statutorily required including that of the Kolkata Bench of the National Company Law Tribunal,” according to the annual report, published on Tuesday.
The proposed demerger is part of an ongoing exercise undertaken by the company over the past few months in further realigning and recalibrating operations, aiming to transform each business into entities that are market driven in their approach.
The company had reported Rs 20.75 crore net profit for the March quarter last fiscal, against a net loss of Rs 158.17 crore for the same period previous fiscal, backed by a rise in revenue from operations and a fall in total expenses.
The company had posted its first quarterly profit after about 10 quarters. Its revenue from operations in the March quarter of FY19 had grown 5.2% year-on-year to Rs 1,036.58 crore, according to a stock exchange filing.