Schaeffler slips after weak Q1 performance

Schaeffler India lost 0.72% to Rs 3,277.10 after net profit fell 26.4% to Rs 78.35 crore on 20.8% decline in net sales to Rs 928.54 crore in Q1 March 2020 over Q1 March 2019.

Total expenditure contracted by 19.9% to Rs 791.28 crore and interest payments fell 21.7% to Rs 0.94 crore in Q1 CY2020 over Q1 CY2019. Depreciation costs during the quarter stood at Rs 44.42 crore, up by 17.5% from Rs 37.81 crore reported in the corresponding period last year.

Profit before tax (PBT) fell 32.2% to Rs 110.07 crore in Q1 CY2020 from Rs 162.26 crore reported in Q1 CY2019. Current tax expenses stood at Rs 32 crore in Q1 March 2020, down by 39.1% from Rs 52.55 crore in Q1 March 2019.

"The impact of global health pandemic might be different from that estimated as at the date of approval of these financial results and the company will closely monitor any material changes to future economic conditions," the company said.

Commenting on the results and financial performance of the company, Harsha Kadam, managing director, said, "After facing economic headwinds in 2019, we had started the year with an optimistic view. Even before gaining a complete momentum, economy came to a grinding halt due to Covid-19 pandemic. Despite adverse imapcts during the quarter due to shutdown of operations since 23rd March, the PBT margin for the quarter was achieved at the same level as the preceding quarter. These are unprecedented times, calling for unprecedented measures. Although the operations have started, we are not at our optimum level and neither are our customers. Due to this prolonged uncertain environment, we have prepared ourselves to respond to market with flexibility and agility in coming weeks and months. In addition to our continued efforts towards cost management and cost flexing, we will be intensifying focus on working capital management and cash management to ensure financial stability."

Schaeffler also announced the resumption of operations in all four plants. The first one to restart operations was Savli and thereafter the operations resumed in Maneja, Talegaon and Hosur plants, respectively. In addition to plants, operations also resumed across all its warehouses in Vadodara, Gurgaon, Chennai and Mumbai. Currently all operations have started as per government approval and norms with permitted number of employees, following all safety norms directed by the MHA.

Schaeffler India manufactures a vast range of ball bearings, engine and powertrain components and a wide range of clutches and hydraulic clutch release systems. The company has the largest after-market networks serving the industrial and automotive customers.

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