Kirloskar Brothers to be debt-free company
After being debt-free, the company will focus on cash flow and will not chase topline (revenue) numbers at the cost of profitability
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New Delhi: Leading pump makers Kirloskar Brothers Ltd (KBL) is close to be a debt-free company and will continue its growth journey into domestic and international markets, said a top company official.
After being debt-free, the company will focus on cash flow and will not chase topline (revenue) numbers at the cost of profitability, said KBL Director Alok Kirloskar. "As part of that strategy, we will be a debt-free company. And, if you look at the numbers at the end of this year in March, we are almost debt-free as a company," Alok Kirloskar told.
On a standalone basis, KBL is close to being debt-free and the next objective is to enhance its ROCE (return on capital employed), over 25 per cent and ROE (return on equity) about 20 per cent, added. "The next objective is, of course, enhancing the profitability and enhancing our growth after we are established to be debt-free because we are not comfortable with having large amounts of debt, which was the case in 2010," he added. When asked about the growth, Kirloskar said, "We will continue on the CAGR (compound annual growth rate), that is our objective.
Even in the times of coronavirus, if you see our third-quarter numbers, we have still shown that we are doing better than last year, even though coronavirus." In 2019-20, KBL, a flagship company of the $2.1-billion Kirloskar Group, had reported a revenue of Rs 2,097 crore. However, he also added, "Growing the turnover is important but not at the cost of profitability and cash flow. Our first objective No. 1 is cash flow, No. 2 is profitability and No.3 in turnover." The key sectors in which KBL operate are water and wastewater, irrigation, industrial, commercial building services, and oil & gas. KBL gets half of its business directly from consumers under the business-to-consumer route, and the rest half from the institutional buyers from business-to-business (B2B) and business-to-government (B2G) channels, Alok added. The company has made a big shift from a project company to be a product company. In 2010, around 75 per cent of its revenue was coming from projects and the rest 25 per cent from products.
