Srei net worth 'fully eroded', but company posts Rs 325 crore consolidated net in Q4

Kolkata: The Srei Group's net worth has eroded fully after posting two consecutive years of net losses, even as it reported a ₹325 crore consolidated net profit in the fiscal fourth quarter ended March 31, riding on recovery of loans and a sharp fall in expenses.

Consequently, it has not been able to comply with various regulatory ratios and limits.

"The group had reported net losses for the year ended March 31, 2022, and the earlier year as well. Hence, net worth has fully eroded," said the administrator for the company, which is running into liquidation. "There is severe strain on working capital and operations, and it is undergoing significant financial stress," he added in a filing with stock exchanges.

The quarterly profit was on account of a rise in recovery of loans, which helped total income to grow, and a sharp fall in expenditure. Total income rose to ₹795 crore from ₹595 crore, while expenses fell to ₹482 crore from ₹3,986 crore.

The group posted a net profit of ₹70 crore in the December, or third, quarter. A year earlier in the fourth quarter, it suffered a ₹3,555 crore loss. The net loss for FY22 was ₹2,545 crore, compared with ₹7,338 crore the year before.

The group is expecting improvement in cash flows through loan repayment from its borrowers, monetisation of assets and further reduction in overhead expenditure.

Consolidated numbers for the quarter cover operations of , Srei Equipment Finance and a few other subsidiaries.