The global forecasting firm Oxford Economic has predicted that India's economic growth is likely to lose momentum in the October-December period of the ongoing financial year (April 2020 to March 2021). This forecast comes at a time when major companies in the country are announcing their quarterly results, which were characterised by huge losses.
According to Brand Finance India, a brand valuation consultancy, the country's most well-known 100 brands are likely to lose 15 percent of their brand value. Here's a look at the top 7 companies in the news which are reporting huge losses.
1. Aviation - Indigo
India's largest private airline IndiGo, which recently cut its workforce by 10 percent citing financial woes, has reported a net loss of $379.2 million in the April-June period of financial year 2020-21. The airline had registered net profit of $160.4 million in the corresponding quarter in 2019.
The operations of the airlines were severely affected by the lockdown measures, which temporarily suspended flights between 25 March and 25 May, when only domestic operations were allowed to resume.
The year-on-year revenue of the airline plunged 91.9 percent during first three months of current financial year that ended in June. The low-budget carrier had said in a press release that the cost-saving efforts of the company were not yielding sufficient results to offset the decline in revenues.
2. Automobile - Maruti Suzuki
Maruti Suzuki India, the country's largest automaker, has reported a loss for the first time in the past 15 years as production was marred by the Conoravirus pandemic and the economic restrictions induced by it.
The automobile firm has posted a net loss of $33.30 million in the Q1 of financial year 2020-21. The firm had reported a profit of $191 million last year in the corresponding months.
The company said that the slump can be attributed to a lower sales volume due to weaker demand for automobiles during the pandemic and supply chain disruptions during the two-month lockdown.
3. Telecom - Bharti Airtel
Indian telecom firm Bharti Airtel has posted a net loss of $2,124 million in period of April-June. In the corresponding period last year, the firm posted a loss of $382 million.
While the communication company has stated the adjusted gross revenue settlement, in accordance with a Supreme Court order, had led to such a massive loss, the firm also mentioned that there had been "slower" net additions in the number of 4G customers in the first three months.
"Data traffic growth surged by 73% (year-on-year) even as 4G net additions slowed down to 2 million, due to supply chain shocks in the device eco system," said Gopal Vittal, Bharti Airtel’s chief executive officer for India and South Asia.
4. Tyre Major - CEAT
Global tyre manufacturer CEAT, one of the leading producers of tyres in India, posted a net loss of $4 million for the first three months of current financial year. Last year, for the same duration, the firm had reported a $10 million-profit.
The firm stated in the report that due to the lockdown in April, the fiscal year had started at Zero. However, the company called the period challenging but better than expected.
5. Steel Industry - ArcelorMittal
Global steel major ArcelorMittal has pegged its Q2 net loss at $559 million for the financial year 2020-21. The company, formed in 2006 with the takeover and merger of Arcelor by India's Mittal Steel, uses a January-December fiscal year pattern.
The world's largest steel manufacturer called the quarter ended to June the most difficult period in its history. However, the multinational registered a $447-million net loss in the corresponding quarter of the last financial year as well.
Company CEO Lakshmi N. Mittal stated that the demand for steel was considerably affected due to the coronavirus pandemic.
6. Reliance Industries
Mukesh Ambani-promoted Reliance Industries (RIL) reported a 40.5 percent dip in pre-tax profits (PBT) on Thursday in three months period ended in June as the pandemic and the ensuing lockdowns hit the energy and retail businesses.
“The severe demand destruction due to global lockdowns impacted our hydrocarbons business but the flexibility in our operations enabled us to operate at near normal levels and deliver industry-leading results,” Mukesh Ambani, chairman and managing director of the company said while expressing satisfaction over some positive aspects of this difficult period.
7. Retail - Dabur India
Citing lower operation revenue, India's FMGC major Dabur registered a 6.18 percent decline in its consolidated net profit at $45 million in the Q1 of financial year 2021. In the corresponding quarter last year, the company had posted a net profit of $48 million.
The firm stated that the pandemic brought the business to a standstill and it entered the "position of crisis". Dabur is currently focused on revamping its capacity to deal with the challenging business environment.