Sundaram Brake Linings Ltd. (SBL), which reported a marginal increase of 1.2% in its net export sales for FY20, is focussing on exports to stay afloat, it said.
The short-term outlook for the Indian economy is rather grim and domestic sales are expected to decline substantially. This will have a knock-on effect on SBL’s production and sales, the company said in its annual report.
SBL had grown its exports to almost 50% of its FY20 revenue from operations of ₹258-crore, sustaining operations at tolerable utilisation levels since May 2020.
The U.S. market demonstrated a robust demand during FY20. But following restrictions on dispatch of orders in the last ten days of the financial year, there was only a marginal increase of 1.2% in net export sales.
The suspension of operations and dispatch of goods from March 24 following the nationwide lockdown due to COVID-19 contributed disproportionately to the decreased turnover. It would, however, be inaccurate to blame the entire decline on the pandemic and the restrictions that flowed from it, the company said.
Poor national economic indicators, reduction in demand for new haulage capacity and upcoming model changes caused a record fall in commercial vehicle sales. This can be seen from the significant decrease of 28.9% in original equipment sales.