Bajaj Electricals on Friday posted a consolidated net loss of ₹81 lakh in the quarter ended March 31, compared to the profit in the year-ago period. This is due to the call taken by the company to intentionally de-grow its engineering, procurement and construction (EPC) business.

The company had posted a net profit of ₹23.08 crore in the fourth quarter of last year.

Bajaj Electricals had taken certain non-cash provisions in the EPC segment, Anuj Poddar, Executive Director, Bajaj Electricals told BusinessLine . As for its consumer products segment, the company has registered a flat growth despite the Covid-19 pandemic, he pointed out.

The total revenue from operations stood at ₹1,300.66 crore during the quarter, compared to the year-ago period’s ₹1,775.18 crore, a 26.7 per cent fall.

Shekhar Bajaj, Chairman and Managing Director, said: “We continue to drive growth in our consumer products segment while adopting a more risk-calibrated approach for the EPC segment with a focus on completion of existing projects on hand. Despite the impact of Covid-19, our consumer products segment has maintained its revenues and delivered an EBIT growth of 37.4 per cent in the current quarter. While the EPC segment revenue has registered a planned de-growth due to selective bidding for fresh contracts. In the near term this will continue to impact profitability, but we remain confident about a healthy bounce back as our strategic shift plays out.”

During the quarter, the consumer products segment of the Bajaj Electricals earned total revenue of ₹747 crore, as against ₹743 crore, a growth of 0.5 per cent over the corresponding previous quarter. Its EPC segment has achieved a total revenue of ₹554 crore, as against ₹1,032 crore, registering a de-growth of 46.3 per cent over the corresponding quarter of the previous year.

On the way forward for Bajaj Electricals’ EPC business, Poddar said that it would be selectively bidding for projects and tenders, which would take into consideration the criterias of margins and payment terms.

The current de-growth trend in the EPC business will continue for another two-three quarter, he said.

For the year, the company generated positive cashflow from operations of ₹626 crore as against a cash outflow from operations of ₹621 crore in the previous year, it said. Further, in the quarter ended March, the company had raised ₹350 crore through rights issue, the proceeds of which were used primarily for repayment of debts. This has helped turnaround the balance sheet with reduced debt and improved debt to equity ratio from 1.5 (as on March 31, 2019) to 0.7 (as on March 31, 2020), it said.

The company’s operations was impacted in March, April and May, due to temporary suspension of manufacturing facilities, sales and distribution and execution of EPC contracts following nationwide lockdown announced to curb the spread of Covid-19, it said.

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