The India Cements calls back advances to manage working capital needs, posts loss of Rs 81.39 cr
With its plans to sell non-core assets to raise money for the refurbishment of plants and working capital getting into procedural delays, cement major The India Cements Ltd is getting back its advances from group companies, said a top official.
Further the company closed the second quarter of FY24 with a net loss of Rs 81.39 crore down from a net loss of Rs 137.58 crore booked during the previous year corresponding period.
“The sale of surplus land is taking time. To ease the working capital constraint first we are getting back the advances given to group companies,” N. Srinivasan, Vice Chairman and Managing Director told reporters here on Wednesday.
The India Cements has not recognised the profit on sale of land amounting to Rs 42.81 crore in its Q2 results on the sale of 73.75 acres and receipt of the entire condition primarily due to the condition that the land has to be converted into industrial land from its current classification.
Officials said the company will be getting back about Rs 250 crore of its advances which in turn would ease its working capital constraints.
The company is not approaching the institutions for loans.
The relief in working capital will in turn enable the company to increase its capacity utilisation and augment the cash flow.
Srinivasan said the company will refurbish its old plants once the present cash constraints are taken care of.
The India Cements has engaged the services of experts like FLSmith and ThyssenKrupp Industries to conduct a detailed study on the operating parameters of some of its plants for refurbishment/modernisation to bring them in line with that of state-of-the-art modern plants.
The company has engaged Boston Consulting Group to study the operations at three of its plants in Andhra Pradesh and Telangana and suggest measures for improving efficiency in their operations.
Meanwhile, The India Cements closed the quarter ended September 30 with an operational revenue of Rs 1,222.13 crore (Q2FY23 Rs 1,254.65 crore) and a net loss of Rs 81.39 crore (Rs 137.58 crore).
Srinivasan said the selling price of cement is under pressure due to supply overhang but there has been a substantial reduction in variable costs.
During the period under review India Cements sold 23.70 lakh ton as compared to 22.54 lakh ton in the previous year corresponding period.