The net profit has seen a steep fall due to poor sales.
Dairy major Kwality Ltd said that its net profit during the first quarter of the financial year 2018-19 has declined to Rs 1.04 crore. The net profit has seen a steep fall due to poor sales.
During April-June, 2017-18, the company’s net profit stood at Rs 27.87 crore. The net income has also been decreased to Rs 1,265.78 crore from Rs 1,573.18 crore.
Currently, Kwality is facing an issue of receivables management.
The company said, "This started when the company could not service its customers with the required goods due to liquidity crunch, a situation that emerged primarily towards the end of the quarter triggered due to non-disbursement of sanctioned working capital from banking partners."
"In view of the consistent recession in the global market, Kwality has decided to discontinue in a phased manner its operation of the wholly-owned subsidiary "Kwality Dairy Products FZE". While the decision is expected to optimise the earnings on a long-term horizon, it has a short-term impact of delay in the collections from the parties to whom the company is no longer supplying the goods," Kwality further added.