The BK Birla group company Kesoram Industries Ltd registered 89 per cent growth in standalone net profit at ₹34 crore for the quarter ended June 30, 2021, as compared with ₹18 crore in the same period last year.

The rise in net profit came on the back of a jump in volume sales by around 88 per cent at 1.69 million tonnes (mt) during the quarter under review, as against 0.9 mt in the same period last year.

Also read: Kesoram Industries to raise ₹400 cr via rights issue

Standalone revenue from operations increased by 97 per cent at ₹804 crore (₹409 crore).

Kesoram’s EBIDTA increased to ₹187 crore during the period against ₹110 crore.

“Directionally, the operation has stabilised post infusion of working capital is evident from the fact that EBIDTA generation is higher by ₹49 crore in the current quarter versus Q4 of FY21 (of ₹138 crore),” the company said in a press statement.

Consolidated profit

On a consolidated basis, revenue was up by 100 per cent at ₹855 crore (₹427 crore). The company posted a net profit of ₹13 crore on a consolidated basis, as against a net loss of ₹16 crore in the same period last year.

During the current quarter, due to continuing restriction in logistic activities of non-essential goods on the onset of the second wave of Covid-19 pandemic, the company’s subsidiary declared temporary suspension of work at its rayon plant situated at Kuntighat in the Hooghly district of West Bengal effective June 22, 2021 until further notice. Hence, sales from this plant have come down significantly due to the lockdown and the management expects that it will be restored when full normalcy is in place.

Rights issue

The company’ board on Thursday approved the proposal for raising of funds through issuance and allotment of partly paid-up equity shares of face value of ₹10 each for up to an aggregate amount of ₹400 crore on rights basis on such terms (as decided by the Board of Directors or Fund Raising Committee of Directors) to the eligible equity shareholders subject to receipt of regulatory and statutory approvals.

The offer price per equity share under rights issue would be ₹50 per equity share and the entitlement ratio would be decided by the FRC subsequently, the company said in notes to accounts to stock exchanges.

The company’s commitment to substantially reduce its debt is likely to gather momentum with the board approval for rights issues.

Kesoram’s net debt currently stands at around ₹1,890 crore. The company plans to bring it down to nearly 3.5 times of the EBIDTA over the next 12 months.

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