The Covid-19 pandemic has started affecting the capex plans of companies.

Grasim Industries, the diversified entity from the AV Birla group, on Thursday said it was putting on hold its capex of Rs 3,880 crore for this fiscal as demand took a hit on account of coronavirus and the subsequent lockdown.

In a conference call with analysts, Grasim Industries said it will take a final decision based on the demand outlook.

The top management, however, clarified that it was not withdrawing the capex or cancelling projects, but the expenditure will be executed in a staggered manner.

According to a note from Motilal Oswal, the management said the output from its plants was very low. Only one of the four viscose staple fibre (VSF) plants and two of the 13 chemical units are operating and that too at only 30-40 per cent utilisation levels.

The brokerage has a neutral rating on the Grasim stock.

According to the management, the company is in a position to start production within 3-4 days of the lockdown being lifted with all raw material supplies tied up.

However, in VSF, the management expects the production ramp-up to be fast once the market opens.

While the company feels that a steady state of output will take time, all plants will start operating by the end of this month.

The management also added that the logistics situation in the country was improving and that though long distance movement continued to be hampered, it was set to improve in the coming weeks.

At the conference call, Grasim Industries also disclosed that it has a strong business continuity plan on the back of a healthy liquidity of around Rs 2,000 crore of cash and cash equivalents and supply chain readiness.

As of December 2019, its gross debt stood at Rs 4856 crore, which is largely unchanged presently.

The Grasim share today ended at Rs 543.80- a gain of 1.61 per cent over the last close.