Another engineering company, Thermax, has also been hit by bad market conditions. While sales grew by 35 per cent, sundry debtors have shown an increase of 67 per cent. The average credit period increased from 73 days to 90 days. Alfa Laval has also increased its credit period to its customers from 131 days in 1994-95 to 161 days in 1995-96.
However, suppliers to these companies have not shown a similar approach towards these companies. They have not been able to stretch sundry creditors to any great extent, and have had to increase borrowings. This, coupled with higher rates, has resulted in a sharp increase in the interest cost of these companies.
