Wendt (India) soars 8.5% despite estimates of adverse Covid-19 impact in Q1FY20

The company does not foresee any material impact on its capital and financial resources.

Jul 06, 2020 09:07 IST India Infoline News Service

Wendt India
Wendt (India) Limited informed the exchanges Saturday that the lockdown conditions imposed resulted in shutting down of its manufacturing operations from March 23, 2020 with the operations resuming from April 30, 2020.

Though its operations have resumed, the lockdown continues in different phases across the country impacting overall demand and supply. As per its initial assessment, the company expects the above to have an adverse impact on the performance of the company for the quarter ended June 30, 2020. Considering the nature of the pandemic and the consequent uncertainty, the company is not able to quantify the future impact on the business now.

However, the company has undertaken a rigorous review of its business plan as well as a contingency plan based on scenario planning being closely monitored by the management.

Wendt India Ltd is currently trading at Rs2,800 up by Rs171.9 or 6.54% from its previous closing of Rs2,628.10 on the BSE.

Considering the overall impact on the demand and supply conditions globally, the performance of the company’s wholly owned subsidiary - Wendt Grinding Technologies Limited, Thailand would also be impacted.

The company does not foresee any material impact on its capital and financial resources. On a standalone basis, the company is debt-free providing necessary liquidity to meet its financial obligations.

The company has made an assessment of its liquidity position for the FY21 and has critically assessed the recoverability and carrying values of its assets comprising of property, plant and equipment, trade receivables, inventory, investments and envisages no major impact on its assets.

The company is closely monitoring its raw material requirements and alternative sourcing mechanisms for uninterrupted operations.

“The outbreak of the Novel Corona Virus Disease 2019 (Covid-19) has caused unprecedented disruptions globally resulting in various nations announcing a lockdown situation. The operations at our manufacturing facility situated at Hosur, Tamil Nadu was temporarily suspended in a safe manner from March 23, 2020 after following due protocols and in adherence to the Government advisories.

Since the company’s facility was located in a green zone, operations resumed on April 30, 2020 with permitted workforce after ensuring receipt of requisite permissions from the local authority and in adherence to the standard operating procedures laid down by the Ministry of Home Affairs from time to time,” company said.

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