Tyre major MRF Ltd. expects its financials for the first quarter of FY21 to be adversely impacted due to the forced shutdown of plants during this period on account of the pandemic.
The expected financial impact is not ascertainable at this stage, the company said in a regulatory filing on the impacts due to Covid.
Given the uncertainty around the severity and duration of COVID-19, it is difficult to accurately assess the financial impact on future performance at this point of time, it said. Demand is expected to be less than normal. On the production side, COVID management issues may pose some challenges. There could also be challenges with regard to the availability of raw materials because of issues faced by vendors, it added in the statement.
By the end of May 2020, there had been improvements in the opening up of tyre sales outlets across the country, but many of them were still not operating fully and also, operating only for a few hours daily, it noted. MRF’s sales offices have opened in most of the places, it said.
It added that it had a ‘favourable’ liquidity position due to ‘strong net worth and low levels of debt’.