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Companies disclose financial impact of coronavirus lockdown; Titan sales drop 50%

SEBI had earlier asked listed companies to disclose to investors and stakeholders the impact of the coronavirus pandemic on their businesses

twitter-logoBusinessToday.In | May 27, 2020 | Updated 13:39 IST
After SEBI's push, companies report financial impact of coronavirus lockdown
India has been under lockdown since March 25

Days after SEBI asked companies to disclose financial impact of lockdown, over ten firms have reported an expected hit from the coronavirus crisis. Even as several listed companies earlier disclosed information on shutdown of operations, they didn't report on expected financial losses owing to lockdown. DMart, Titan, Leela Hotels are some of the companies to have revealed the estimated hit of coronavirus lockdown on their business so far.

"The Company's operations were hit substantially from 17th  March  2020  till  the  1st  week  of May  2020,  when  lockdown  was  gradually  lifted," Titan said.

"The  sales  in  stores  that  have  opened  up  are  at  around  50%  of  the sales in a normal period and are improving gradually.  These are early days and the Company is not in a position to gauge with certainty the future impact on operations but expects normalcy to  be  achieved  only  after  a  quarter.  Customer  sentiment  pointing  to  reduced  spends  on discretionary items might impact demand for most of the Company's products," Titan also said. The drop in sales is also expected to impact store profitability in the near term and hence store rollouts will be calibrated in the immediate future until more clarity emerges, it noted.

Leela Hotels estimated zero revenue in the June quarter. DMart said that the revenue has been down by 45 per cent in April since start of the new financial year and things could get worse. "Significantly large EBITDA declines are to be expected due lower sales, lower gross margins, higher cost of operations on account of hardship allowance to front line staff during lockdown and higher personal hygiene/store sanitation costs" it added. More companies are likely to release the information in the coming days. India has been under a lockdown since March 25 and the lockdown is likely to be lifted on May 31.

SEBI had earlier asked listed companies to disclose to investors and stakeholders the impact of the coronavirus pandemic on their businesses. Listed entities should evaluate the impact of coronavirus pandemic on their business, performance and financials, both qualitatively and quantitatively, to the extent possible and disseminate the same to investors, SEBI had said in a circular last Wednesday.

Sebi had also advised the stock exchanges(BSE and NSE) to bring the provisions of this circular to the notice of all listed entities and also disseminate the same on their websites.

The list of information that listed entities have been asked to disclose, subject to the application of materiality, include impact of the coronavirus outbreak on the business; ability to maintain operations including the factories or units or office spaces functioning and closed down; schedule, if any, for restarting the operations; steps taken to ensure smooth functioning of operations; estimation of the future impact of coronavirus on its operations.

Also read: Coronavirus crisis: Nokia closes Tamil Nadu plant after 42 employees test positive

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