Backed by higher cement volumes and rising prices together with rationalisation of costs, BM Birla group’s firm Kesoram Industries posted a net profit Rs 8.8 crore for the quarter ended March 31, 2019, compared to a net loss of Rs 160.17 crore in the same quarter the previous year. This is the first time the company posted a post tax profit after 10 quarters of losses.
Despite its sales revenue rose by 5.20 per cent to Rs 1036.58 crore during the quarter, 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 profit.
“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,” said P Radhakrishnan, the company’s chief financial officer.
Radhakrishnan also 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 had shot up 27.96 per cent to Rs 783.28 crore. During the 2017-18 to 2018-19 fiscal year, the company 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.