Kirloskar Brothers to focus on cash flow, reducing debt

By: |
November 11, 2020 3:30 AM

The company has continued with its policy of not giving credit to the dealer channel even if it means a reduction in sales, Kirloskar said.

During the September quarter, KBL reported a 27% year-on-year drop in revenue to Rs 642 crore, while net profit was at Rs 26 crore as against a loss of Rs 7 crore reported in Q2FY20.During the September quarter, KBL reported a 27% year-on-year drop in revenue to Rs 642 crore, while net profit was at Rs 26 crore as against a loss of Rs 7 crore reported in Q2FY20.

Pumps manufacturer Kirloskar Brothers (KBL) will be focusing on cash flow and turning debt-free — and not on chasing the top-line — in these challenging times, the company said on Tuesday.

Alok Kirloskar, MD of SPP Pumps, UK, and director, KBL, said the company will be looking at profitable sales growth. Focus on collecting money so that the company isn’t stuck with debt resulted in strong cash flow of `150 crore in the second quarter of FY21, he said.

The company has continued with its policy of not giving credit to the dealer channel even if it means a reduction in sales, Kirloskar said. For large customers, the company was offering credit only under Letter of Credit, which is secure credit. The company has consciously reduced its project business and focused on products, he said.

During the September quarter, KBL reported a 27% year-on-year drop in revenue to Rs 642 crore, while net profit was at Rs 26 crore as against a loss of Rs 7 crore reported in Q2FY20.

“There is a recovery [compared to April-June 2020] with the second quarter showing improvement with a strong domestic and export order book position. We are catching up and trying to get to at least to last year’s performance,” Kirloskar said.

KBL has orders worth Rs 1,528 crore for the next two quarters. It had orders from the industrial business, which was aided by government spending, and the real estate segment, which was completing projects. The company’s overseas business in Europe and US, too, benefited from government spending during the pandemic, he said.

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