CCL Products face minimal impact due to Covid-19; stock trades flat

Lockdown conditions impacted coffee consumption in HORECA segment, however, it was adequately compensated by increase in house consumption.

Jul 16, 2020 10:07 IST India Infoline News Service

CCL Products (India) Limited informed the exchanges Wednesday that the company is operating in food and beverages sector. As Covid-19 is a global pandemic, lockdown conditions in several countries impacted coffee consumption in HORECA (Hotels, Restaurants and Cafes) segment, however, it was adequately compensated by in house consumption which seem to have picked up during lockdown.

The cashflows and financials of the company were not affected since it could maintain almost normal operations till date. The company has adequate liquid current assets and unutilized credit lines which will enable adequate cushion against any sensitivity.

The company is having adequate resources for meeting its debt servicing and for the operations. There is no major stress anticipated on the demand for the products or on the supply chain. The financial reports and control aspects continue to be robust in the Company.

The company had already tied up the financial arrangements for the capex being executed in this year and hence no hurdles are anticipated on the execution of the projects other than occasional logistics issues, in general.

The company had to suspend operations for few days, starting from April 1 till third week of May due to non-availability of packing materials required for production and dispatch.

Transportation of materials got severely hampered due to strict lock down restrictions. Gradually by the end of May, the company was able to resume the operations to normalcy by strictly maintaining social distancing and hygienic practices, for the safety of the people at factories and corporate office.

However, there is no impact on operations in our wholly owned subsidiaries located at Switzerland and Vietnam.

The company restarted operating at normal levels from May 25, 2020. However, the operations in India have to be tone down occasionally due to reporting of cases in nearby villages from where the attendance of employees/workers is being restricted.

As many countries are facing second and third wave of Covid-19 pandemic, it is very difficult to estimate the future impact on the company, as major part of company’s business depends on exports. However, Management of the company is optimistic on the business operations of the company as it has strong customer base widely spread across the globe and is not specifically dependent on any region.

CCL Products (India) Ltd is currently trading at Rs240, up by Rs0.2 or 0.08% from its previous closing of Rs239.80 on the BSE.

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