Covid-19 impacts profitability of Minda Corporation in first two quarters of calendar year

The company expects from Q2FY21 the profitability will improve quarter on quarter as the demand scenario improves.

Jul 14, 2020 01:07 IST India Infoline News Service

Minda Corporation Limited informed the exchanges Tuesday that the revenues and profitability of the company for Q4FY20 and Q1FY21 be impacted but the details will be known once the audit of the same periods gets completed. From Q2FY21 the profitability will improve quarter on quarter as the demand scenario improves.

The company has good amount of cash and cash equivalent balances to meet its financial and other obligation. The Company also has unutilised line of working capital and other unused credit lines. Both the Rating Agencies i.e. Crisil and India Ratings and Research have reaffirmed the Rating of the Company in the month of June’20.

In Q4FY20 the rampant spread of Covid-19 outbreak throughout the globe has hurt economic growth. This economic fallout from the pandemic will hurt discretionary consumption and spending in FY21. To avoid the spread most of the Countries started locking the movement of goods and people.

The Company has taken all the measures to manage the smooth supply chain for its product before the lockdown started in India.  Due to the lockdown announced by the Government of India from March 25, 2020, entire operations of the Company came to a halt.

All the manufacturing facilities and offices were shut down entirely during lockdown period of almost 25 days till April 20, 2020). During the lockdown period the company has adopted work from home for its offices.

The company is in the process to ramp up its production as the process of unlocking of the economy has started by the Government and the demand outlook is improving on month on month basis. With the gradual phasing out of the lockdown going forward, the company expects to see demand revival.

Minda Corporation Ltd is currently trading at Rs71.40 down by Rs0.25 or 0.35% from its previous closing of Rs71.65 on the BSE.

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