CG Power and Industrial Solutions, which was acquired by Tube Investments of India in November last year, has returned to black by reporting a standalone net profit of ₹674 crore for the quarter ended March.
The company had reported a net loss of ₹184 crore during the corresponding year-earlier period. Revenue from operations more than doubled to ₹1,022 crore from ₹465 crore.
There has been a complete rebound in manufacturing and sales of all the divisions, CG Power said.
Margins were impacted due to a steep increase in material costs (impact at 5% of sales) as the company could not procure or cover these items earlier due to financial difficulties. Other expenses were higher with ₹46 crore incurred in expenses relating to legacy issues. But for the above, the profit before taxes would have been higher, CG Power said.
On Friday, the board approved capital expenditure of ₹135 crore for the current financial year. This would be spent on balancing, de-bottlenecking and modernising facilities at plants to improve production and productivity, and will be financed from internal resources. Barring four wholly owned subsidiaries operating in Sweden, Germany, Netherlands and the U.S., the rest are either being closed or in the process of being wound up, the company said.
