Revenue loss and labour top worries

PTI photo
MUMBAI: A week after markets regulator Sebi asked companies to disclose in detail their estimated and expected losses due to the Covid-19 pandemic, disclosures by some of the leading corporates show that loss of revenue, along with the availability of labour and logistics challenges, top the list of hurdles.

Of the about 25 corporates that have disclosed to the exchanges the impact of the Covid-19 pandemic on their businesses, the top ones include Bharat Forge, Titan, Avenue Supermarts (D-Mart), Dabur and L G Balakrishnan.

Pune-based Bharat Forge, which is a major supplier to global auto majors and also into defence hardware production, said that after an initial closure of its operations in India and Germany, it has partially resumed operations in both the facilities under strict new operational rules. Its factories in the US and Europe are also running but at sub-optimal levels. Retailing major Avenue Supermarts, which runs the D-Mart chain of malls, said its sales are down 45% in April 2020 from April 2019 and that it paid hardship allowance to a large number of its frontline staff.

Tata Group’s watches-to-jewellery retailing arm Titan said it lost complete sales during Akshaya Tritiya and, as of May 27, about 43% of its stores were operational under the new social distancing guidelines. “The share of online business is around 2%of sales. The sales in stores that have opened up are at around 50% of the sales in a normal period and are improving gradually,” the company said in a statement to the BSE.

Labour and logistics are also seen as major hurdles in resuming normal operations, corporates said. Discussing the future impact of Covid-19, Bangalore-based real estate firm Parsvnath Developers said that the temporary suspension of construction activities and the reduced level of operations are likely to have a significant financial impact, the extent of which is not quantifiable at this moment. “Moreover, there is an acute shortage of labour. Though we do hope the business situation should normalise soon, once the situation comes under control.”

VRL Logistics, a leading player in another labour-intensive sector, said that the migration of labour and drivers initially had taken a heavy toll on its operations. However, it is an essential service provider, in the last two months it has been able to manage enough number of drivers and labourers to manage its operations, “but we would need to be well prepared in advance to have sufficient manpower as volumes go up gradually as expected”, the company said.