National Steel and Agro Industries hit hard by Covid-19 crisis

The company's capital and financial position have been affected due to the burden of fixed overheads on the company.

Sep 02, 2020 09:09 IST India Infoline News Service

National Steel and Agro Industries Limited informed the exchanges on Tuesday that the company's capital and financial position has been affected due to the burden of fixed overheads on the company.

In the prevailing Covid-19 situation the company's revenue for the first quarter of FY21 is impacted. As the business situation is very fluctuating, the company is closely monitoring it and hoping the same could be normalized from third quarter.

The company has some liquidity issues prevailing due to delay in supplies from the supplier and in the realization of receivables. However, it is trying to handle as much as possible by following the strict cash flow management practice.

Because of the lockdown in the entire nation and due to continuous fixed financial burden, the inability of the company to service its debt and other financial obligations has been aggravated.

National Steel & Agro Industries Ltd is currently trading at Rs3.93, up by Rs0.18 or 4.8% from its previous closing of Rs3.75 on the BSE.

“Due to lockdown extended to the entire country, the supply chain has been severely affected. However, the situation is improving gradually with relaxing lockdown norms. In the current scenario the demand continues to be at a slower pace. However, the company is positive and hopes that it will get normalized soon,” company said.

The company's operations were impacted due to suspension of production at the plant following the nationwide lockdown announced by Government of India, State Governments and district authorities.

The company was expecting to receive assistance from the Government and Semi Government authorities in regard to the fixed financial operational burden on the company. However, the company has not received the same.

The company has resumed operations at factory considering order book and limited workforce, in a phase manner since April 25, 2020 and at administrative office at Indore since June I, 2020 adhering to the safety norms prescribed by Government of India.

Based on the assessment carried out by the company on the assumptions used and based on the current indicators of future economic conditions, the company foresees a contraction in demand of steel products used in construction, roofing, household appliances, transport, packaging etc.

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