Dear Friends ,
We are all facing unprecedented times. Never in our lifetime have we had an instance where the government had effectively closed down major parts of the economy so quickly and suddenly for the purpose of maintaining the health of the population of the country. This is not just an India phenomenon but is happening all over the world as COVID-19 goes around the world with its deadly force. The implications for all of us, from both a personal and business perspective, have resulted in significant changes to our day-to-day lives. Schools are closed, Corporate India is all working from home, travel has been brought down to a standstill, offline retail is shut down except for essential groceries and medical stores, and we have to put together resources across the country to ensure our healthcare system is able to fight the onslaught of COVID-19. While we did not predict this unfortunate event, we do believe we are well positioned to survive and thrive in this environment.
Through our investment strategy of focusing on attractive, bottom line oriented, durable diversified businesses, conservative entry valuations, effective use of leverage, combined with our operational philosophy of close engagement with our management teams and our mentors and advisors, and our experience managing in stressed situations, we will not only be able to manage our way through this crisis but also position ourselves to take advantage of opportunities to continue to grow our businesses successfully once we get to the other side of this downturn.
At IvyCap, in response to COVID-19, we have taken appropriate actions to maintain the health and safety of our employees. Since March 16, our offices have been closed and all of our employees have been working remotely. We have previously put in place appropriate technology that has enabled us to work effectively and efficiently from home and have continued our normal cadence of internal meetings. We have also eliminated all travel. So far, we have had no instance of anyone at the firm or in our founding teams, contracting the virus or even having a health issue that would warrant getting a test.
Like in every crisis, those companies and businesses which survive the crisis tend to come out stronger. Towards this end, IvyCap is working closely with its portfolio companies and external environment to make sure our companies recover from this crisis heathy and are better positioned. While this may not be the case for all our companies, our engagement with portfolio founders has been very encouraging and most of them are deeply committed to steering their businesses and organizations to success. They are demonstrating resilience, agility, entrepreneurship and leadership in charting a business and financial path to recovery. I wish all you are taking adequate precautions during these times. I wish you safe and healthy lives and hope that we all will be back to our daily normal lives sooner than later.
Vishal Jindal, Co-founder & Director
Sure. For big brands in the food delivery space, there should be a silver lining in the current crisis. As people might not go back to dine-in & clubs for a long time. And according to food aggregators, around 30% of smaller dine-in & delivery outlets might not survive this crisis. People should shift majorly to food delivery from big brands which they can trust for safety & hygiene.
BBK outlets wherever state govts are allowing us to be open are doing quite well in the current crisis too. Some state govts are not allowing Food delivery outlets to be open despite the Central govt putting Food delivery under essential services. This situation should become much better in the next few weeks. We believe BBK should be in a very good position to take care of this opportunity.
BBK is extra serious about safety & hygiene in current crisis. We are screening all employees for right body temperature very day. Kitchens are sanitized every hour and delivery bags after every order. All kitchen employees are wearing masks & gloves at all times. At BBK we make fresh Dum Biryani for every individual order, and deliver in same handi in which it is Dum cooked. Only the customer opnes the Biryani Handi seal ensuring further freshness & hygiene. All Delivery bags to customers also have tamper proof seal. BBK website we have created “Safety” tab which all customers can view for extra steps we are undertaking currently. There is also a safety video whose link we send to all customers on sms after their order is dispatched.
BBK has negotiated all outlets rentals for next 3 months greatly. Corporate salaries have been voluntarily reduced by around 30%. Some employees who might not have enough work in current scenarios like expansion have taken sabbatical for this period. Input costs for certain raw materials have been reduced. Marketing & promotion expenses have been substantially reduced. We have worked out scenarios in which under much reduced sales during lockdown, the losses should be quite less.
Till the situation normalizes, BBK plans to focus more on profitability. And growth henceforth. How are you preparing yourself to ensure minimum damage and faster recovery? By keeping costs low & organization lean & agile. And yet preparing for fast recovery & growth which should come soon in case of Food delivery. In US Dominos Delivery has seen surge even in current crisis.
Customers are noticing how BBK has reacted proactively on safety, hygiene & great communication during this crisis. BBK need to do PR & marketing should be less after this crisis as we should be able to enhance our Brand image through our proactive steps during this crisis. BBK has been also giving out lots of daily complimentary meals to need in different cities during this crisis.
India should hopefully be able to come out of this crisis much sooner & stronger than most other countries due to timely steps taken by Indian govt. Given the low interest rate scenario and companies looking to hedge their bets beyond China, India should see rush of investments after this crisis.
India should hopefully be able to come out of this crisis much sooner & stronger than most other countries due to timely steps taken by Indian govt. Given the low interest rate scenario and companies looking to hedge their bets beyond China, India should see a rush of investments after this crisis. Food delivery brands should see good times after Lockdown opens & BBK should be a big beneficiary.
BBK has ensured that most outlet staff get lodging & food during this crisis. Also we have kept communication & employee morale quite high through regular virtual town hall meetings for all employees & empowering them further.
We would recommend waiving GST for next 3 months. And Food delivery being essential services, govt should ensure cooperation of local govts at ground level with Food delivery companies.