Ice cream & food products player Vadilal Enterprises Limited has underlined a likely impact on the company's business following the Covid-19 outbreak and the subsequent lockdown in the country during the peak summer business season.
Covid-19 has impacted the normal business operations of the company by way of interruption in distribution, supply chain, closure of ice cream shops and parlours during the lock-down period, Vadilal informed in a regulatory filing stating that the impact will be seen on the company's financial results.
For the financial year 2018-19, company reported revenues from operations at ₹573 crore as against ₹546 crore, showing a rise of 4.99 per cent in earnings, where as its profits had stood at ₹9 lakh for the fiscal as against ₹15 lakh reported in the previous year, showing a dip of about 40 per cent on year-on-year basis.
In its latest filing, Vadilal informed that the summer season (usually considered four months of March to June) plays a vital role in Ice cream business and impacts company’s sales greatly; almost 60 per cent of sales target is achieved in the hot summer months.
However, this year, right at the onset of summer in February the coronavirus presence started being reported in India. Globally the Covid-19 cases started surging and prompted the World Health Organization (WHO) to declare the novel Coronavirus disease (Covid-19) outbreak a global pandemic on March 11. "Consequent to this, Government of India had declared lockdown on March 23, 2020," the filing said.
As part of the mandatory disclosure norms by the market regulator SEBI about the material impact on the company's businesses due to Covid-19, Vadilal stated, "Our industry has been severely impacted by this pandemic induced crisis."
"The demand for Company’s products has been adversely impacted and this will in turn have an impact on the results of the Company," Vadilal said adding that the situation remains fluid, and the full extent of its impact on its business was not immediately assessable.
However, from May 4 Vadilal had started serving all the major cities through multiple delivery portal including Vadilal’s own delivery portal, www.vadilalonline.com. Shops and parlors have opened from May 18.
"The company has also taken necessary precautions to ensure the health, hygiene, safety and well-being of all our employees as well as put in place SOPs and guidelines as per state government directives to prevent the spread of Covid-19."
"The Company is in the process of assessing the impact of the Covid-19 situation and the same will be communicated as and when the information is reasonably assessable," it said.
Vadilal Enterprises shares gained close to 5 per cent on the exchanges on Wednesday.