Borrow Like Aurobindo

As per Consolidated Financials on 31 March, 2017 :

Finance Costs:  Rs. 66.72 Crores

Borrowings:  Rs. 3084.12 Crores

Cost of Interest:  2.16 %

Red Flag or Salute to the CFO?

5 replies on “Borrow Like Aurobindo”

A few things – Need to know the weighted average period on books of the borrowings. Could be some part is getting capitalized.

Looking at numbers in isolation does not reflect the true nature. The finance cost has reduced by Rs.25.94 crores compared to last year. Also the borrowing (current and non current) have reduced considerably. We need to understand when these got reduced (time frame during the year).

Whatever may be the time frame for holding debt of Rs. 3084.12 cr. as on 31.03.2017, it requires more detailed analysis and therefore a red flag only.

If you go through their Conf Call, RJ asked the same question and management clarified that it is the buyers credit and hence it is cheap. No hedging is required since they will pay the lending company the product. Please correct me if my understanding from the call was wrong.

1) capitalisation
2) netting off with interest income / other income (foreign exchange hedging etc)

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