Shankara Building Products Limited informed the exchanges Wednesday that as the Covid-19 lockdown has eased off in parts of the country, the demand has, as of now, seen an increase in the last couple of months. FY21 demand is likely to be at around 65% levels as compared to last year.
Revenue for April was around Rs26-30cr i.e. 13-15% compared to last year. The May sales were around Rs145-155cr compared i.e. 65-67% compared to last year and in June around Rs165-175cr means 78-80% compared to last year. Overall revenues for Q1FY21 would be around 54-56%.
The overall business environment continues to be very uncertain. Recurrent lockdowns add to the business challenges and money flows. The banks and NBFC’s are also taking cautious approach in this environment. While some of the tier 2/3 locations have not been impacted as much as of now, the end consumer sentiment is dented. Fresh spending on new projects is likely to be pushed out. Commercial real estate assets are expected to face challenges with changing consumer habits.
The company’s three business segments have been impacted. The walkins in the retail stores have been reduced and home construction/ renovation plans have been deferred. The enterprise segment has been impacted by end user demand and no form schedules. the channel segment as of now continues to hold at a lower threshold. The processing business currently operates at lower levels.
The company has been very cautious on capex and opex and overall fixed cost have been realigned to the new business requirements. Despite cost control measures, lower revenues and lower gross margins will have an impact on Q1FY21 results.
Shankara Building Products Ltd is currently trading at Rs338.80, down by Rs5.45 or 1.58% from its previous closing of Rs344.25 on the BSE.
