‘6 to 9 months, even longer for consumption to get back to normal,’ says Dinesh.
It will have both short-term and long-term impact. Today, we are operating only about 15-20% of our normal business. We have about a thousand people working, as against 12,000 to 13,000 people under normal circumstances. Therefore, it is going to have a short-term impact on our cash flow and operations. While post-lockdown this may improve, it is going to have a significant short-term impact as we ramp up during the next couple of months. It will affect other businesses and the economy as a whole. It will be about six to nine months or even longer for the consumption side to get back to normal. Definitely the first two quarters will be significantly impacted and it will last beyond the third quarter, with some pick-up happening by the fourth.
The supply chain sector needs cash flow. So, the banks have to provide funding through ways and means advances, which means that it is not linked with an asset or with any working capital related security. Logistics sector can use these funds to pay salaries to employees and repay this over a period of three years. Further, the losses incurred during the first quarter can be treated as a deferred revenue loss and can be written off over a period of the next three years rather than writing off in one go, because this is an extraordinary event affecting everyone. This would also help the engines of the economy to keep running.