Companies

BEML plays catch-up to make up for production loss due to pandemic

PTI Bengaluru | Updated on October 04, 2020 Published on October 04, 2020

BEML Chairman DK Hota

BEML has put in place a “catch-up plan” to make up for the production backlog induced by Covid- 19 pandemic, with manufacturing plants now operating near normal, its Chairman and Managing Director Deepak Kumar Hota said.

The lockdown from March had impacted BEML’s turnover and production due to the closure of manufacturing facilities, disruption in spares and service business, non-receipt of items on account of supply chain disruptions, restrictive movements and non-availability of required trailers among others, he said.

In addition to loss of revenue, due to distressed cash flow operations, inflows from customers have stopped or slowed down significantly while outflows especially to MSME and other vendors are continuing resulting in serious liquidity crunch, Hota told PTI.

 

The Bengaluru-headquartered company under the Ministry of Defence has set a revenue target of over ₹4,000 crore for 2020-21, up from ₹3,029 crore in the previous fiscal.

Saving on cost

“There was a shortfall of revenue vis-a-vis our plan in the first quarter. We are making our best efforts to make up this shortfall from the second quarter onwards. We are also trying to reduce cost through various cost optimisation strategy and austerity measures so as to minimise impact on the bottomline”, he said.

Hota, however, added that the manufacturing operations to achieve full scale would depend upon the customers’ capital investment decisions and their cash flow issues.

“Once the lockdown was eased, we have put in place a ’catch up plan’ to make up for the production backlog.

Presently, the manufacturing plants are operating near normal with suitable precautions adopted such as thermal screening and social distancing”, Hota said.

“We are looking at our supply chain to bring in redundancy. Drive for localisation and finding alternate sources are being done on a war footing”, he said.

The company expects to get additional orders valued at about ₹3,000 crore by this financial year-end, Hota said.

“We have orders on hand over ₹10,000 crore and further orders of around ₹3,000 crore are expected by FY 20-21”, he said.

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Published on October 04, 2020
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