Harita Seating Systems embattles with significantly reduced demand

The company expects an adverse impact on profits for the first quarter due to Covid-19 and this is expected to continue into the subsequent quarters as well.

Aug 10, 2020 05:08 IST India Infoline News Service

Harita Seating Systems Limited informed the exchanges Monday that due to the significantly reduced demand as well as suspension of operations there has been a significant reduction in revenues with significant adverse impact on profits for the first quarter. This is expected to continue into the subsequent quarters as well.

In order to mitigate some of the impacts, the company has initiated steps to reduce its costs and also to conserve cash. The company’s current liquidity position is adequate to meet its financial and other commitments. The company has also postponed and or deferred much of its capital expenditure while ensuring that growth is not affected.

Consequent to the lockdown announced across India effective March 25, 2020, the company decided to halt all its manufacturing operations in compliance with the directions of the Government.

The company resumed its operations across all its factories in a phased manner, after obtaining requisite Government approvals. The first plant to open was Pantnagar, by April 26 and all plants were open by May 6.

“Covid-19 pandemic has significantly affected market sentiments and customer demand in the segments of commercial vehicles and buses, where the demand drop is expected to be very significant. Tractor segment demand is robust, owing to the good monsoon and good rabi harvest. Even here, the daily demand from the OEMs remained uneven since the availability of labour is still an issue,” company said.

Company has been closely working with all the Vendors to resume and align production schedules and de-bottleneck supply chain concerns. The reverse migration of the migrant workforce has posed challenges for smooth restart of operations at the company’s vendors.

Harita Seating Systems trade ended at Rs370.40, up Rs2.10 or 0.57% from its previous closing of Rs368.30 on the BSE.

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