Covid-19 takes a toll on bellwether firms
THE Q1 REVENUES OF MARUTI SUZUKI, INDIGO AND BHARTI AIRTEL SAW SHARP EROSION
MUMBAI: Industry bellwethers Maruti Suzuki India Ltd, IndiGo and Bharti Airtel Ltd posted sharply weaker fiscal firstquarter earnings on Wednesday, highlighting the damage unleashed by the Covid-19 pandemic on India Inc.
While the erosion in profits and revenues in the June quarter was not entirely unexpected, analysts warned poor visibility on demand and disruptions to supply chains will be a key concern for investors in the near to medium term.
Maruti, the country’s top carmaker, recorded its first quarterly loss in 17 years.
The Suzuki Motor Corp. unit reported a net loss of ₹249 crore in the three months to June, from a year-earlier net profit of ₹1,435 crore. Revenue fell 80.37% year-on-year (y-o-y) to ₹3,677.5 crore.
For InterGlobe Aviation Ltd, which runs IndiGo, revenue from operations dropped 91.9% y-o-y to ₹766.7 crore in the June quarter, resulting in a record net loss of ₹2,844.3 crore. India’s largest private airline had a net profit of ₹1,203 crore a year ago.
At Bharti Airtel, net loss widened to ₹15,933 crore in the June quarter from ₹2,866 crore last year mainly due to provision towards regulatory dues. Besides, prolonged lockdowns and curbs on movement slowed net additions of 4G users to two million.
“We are going through an unprecedented crisis. Despite this, our teams have served the country well and kept our customers connected,” said Gopal Vittal, managing director and chief executive officer, India and South Asia at Bharti Airtel.
For manufacturers such as Maruti, future outbreaks of Covid-19 and ensuing lockdowns could disrupt plans to meet production and sales targets.
BLEAK PICTURE FOR AVIATION
For aviation, the picture is bleak, though IndiGo is poised to recover faster than other domestic carriers given its adequate cash reserve.
“We believe operations will remain under pressure. With free cash of ₹7,528 crore on its balance sheet, IndiGo is best placed among airlines to weather the crisis,” said Jyoti Roy, equity strategist at Angel Broking Ltd.