A series of disclosures by companies on the financial impact of the covid 19 outbreak underlines the key challenges faced by businesses across the country, manifesting in unique ways to disrupt operations.
The disclosures by about a dozen companies so far comes after the market regulator came down heavily on listed companies for not disclosing financial assessment of the lockdown, which has crippled life and businesses across the world.
Companies including Avenue Supermarts Ltd (DMart), Trent Ltd, Cochin Shipyard Ltd, Titan Co. Ltd and HLV Ltd (The Leela hotels) have shared their assessment of the challenging times ahead. The disclosures give a sense of the major pain points faced by businesses across India.
HLV, which operates in hospitality sector, a sector worst hit due to the pandemic, said the first three months of FY21 will register zero revenues and the impact would extend to the second and third quarters. “As of now, there are barely any bookings being made for the future and the current ones all stand cancelled. There is limited scope for quick revival," the company said.
While grocery chain DMart saw a drop in revenue by 45%, Titan Industries, which has presence in jewellery and personal accessories, lost a big festival sale opportunity during Akshaya Tritiya, and the wedding season. “During March, it (revenue) grew by just 11% over March 2019 due to the lockdown effect of the last nine days of March this year. The trend rapidly deteriorated in April, during which more than half of our stores remained closed for operations or operated for extremely restricted hours."
In contrast, TTK Healthcare Ltd in its disclosure said the food business performed better with 50% of normal average sales during April and it will be better in May, while pharmaceuticals registered 40-50% of average sales. Considering the sub-optimal performance from product lines categorized as essential supplies, such as pharmaceuticals, Woodwards’ gripe water, and negligible sales of other categories, such as cosmetics and medical devices, the performance for Q1 FY21 is likely to be impacted, it said.
Cochin Shipyard said the delay in running projects will have an adverse impact on its financial performance and profitability in FY21, but an assessment of the impact will be possible only after operations in the yard stabilizes.
Real estate firm Kolte Patil Developers Ltd said it expects the company to reach optimum construction levels in 3-6 months post-lockdown, as migrant labourers resume work gradually. So far, it has mobilized around 40% of its construction workforce at its sites in Pune and Bengaluru.
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