In just one quarter, the maker of dairy products Kwality Ltd.’s witnessed several ups and downs starting off with revenue which fell by three-fourths. The firm underwent a heavy loss that’s three times its sales, defaulted on debt and tax payments, had proceedings to attach accounts initiated against it and was dragged to the insolvency court.
Adding to the storm, the firm faced a setback when it underwent forensic audit and its auditor resigned citing “non-sharing of information”.
As per the several reports, the maker of dairy products reported a loss of Rs 951 crore in the quarter ended September, according to its exchange filing. That compares with a profit of Rs 21 crore a year earlier and Rs 1 crore in the previous quarter. Revenue plunged 79 percent year-on-year to Rs 351 crore.
Kwality in debt
Concerns largely stem from its debt. It spiked in the first half of the ongoing financial year to Rs 2,305 crore, with Rs 1,867 crore contributed by current liabilities. That’s because the company now takes 178 days to collect payments—trade receivables—as of September compared with 82 days a year earlier, according to BloombergQuint’s calculations.
The firm slipped 3.23% to Rs 8.1. The stock was the fifth biggest loser in ‘A’ group. On the BSE, 9.04 lakh shares were traded on the counter so far as against the average daily volumes of 11.04 lakh shares in the past one month.
However, the company’s management, according to the new auditor’s limited review report, is confident of continuing operations.