Kolkata: The Srei group has eroded its net worth fully after facing two consecutive years of net losses even as the group reported Rs 325 crore of consolidated net profit in the fourth quarter ending March 31, riding on the recovery of loans and sharp fall in expenses.
Consequently, it has not been able to comply with various regulatory ratios and limits.
“The group had reported net losses during the year ended March 31, 2022, and earlier year as well. Hence, the net worth has fully eroded,” said the administrator for the company, which is running into liquidation.
“There is a severe strain on the working capital and operations of the group and it is undergoing significant financial stress,” he added in a filing to stock exchanges.
The quarterly profit was on account of a rise in the recovery of loans which helped total income to grow and a sharp fall in expenditure. Total income stood at Rs 795 crore against Rs 595 crore while expenses fell to Rs 482 crore from Rs 3986 crore.
The group netted Rs 70 crore in the December quarter while suffering a Rs 3555 crore loss in the fourth quarter of FY21. The net loss for FY22 was Rs 2545 crore compared with a loss of Rs 7338 crore in the preceding fiscal.
However, the group is expecting improvement in cash flows through loan repayment from its borrowers, monetization of assets and a further reduction in overhead expenditure.
The consolidated profit numbers include the operations of
, its wholly-owned subsidiary Srei Equipment Finance and a few other subsidiaries.
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