Impact of COVID-19 on the Indian

Economy

status: confidential
IMPACT ON GDP
• GDP growth rate in 2019 – 5.6%.
• GDP Estimates for 2020

Pre- Crisis Post-Crisis Now

6 to 6.6% 5 to 5.5% 1 to 2%

• GDP Estimates for 2021 back to normal at 6.6%

• The Indian economy expected lost USD 4.5bn ever day during 21-
days of complete lock.
IMPACT ON UNEMPLOYMENT

• Unemployment rose from 6.7% to 26% from 15 March to 19 April.

• An estimated 140m people have lost jobs.
• More than 45% of household reported imcome drops as compared
to the previous year.
OTHER IMPACTS
• Only one third of the USD 2.8tn Indian economy is functional.
• Major corporation have temporarily suspended or significantly
reduced operations.
• The funding for young startups have significantly decreased.
• 36% of Young startup have had layoff to reduce cost.
• Up to 53% of the business have impacted.
• Over 80% of the business have reported a decrease in cash flow.
 IMPACT ON MAJOR
SECTORS
Auto and Auto Components
Sector contribution to GDP and employment: Automobiles - 7.1%,
Auto components - 2.3% and they employ approx. 40m people.
Major auto clusters in India: Chakan, Maharashtra; Oragadam, Tamil
Nadu; National Capital Region (NCR), Sanand, Gujarat.
Current and potential impact on the sector

Supply-Side Demand-Side
• Production shutdown • Consumer sentiment
• Supply chain disruption • Exports
• Imports
• Labour force
 TOP COMPANIES IN THE AUTO SECTOR

Market Famous
Automotive Founded Sector
Share Products Current 52 Wk 52WK MarketCa
Prices High Down LOW Up Beta p PE

Three RE
Bajaj Auto 1926
Wheelers
63%
(Intracity)
2,675 3,315 19% 1,789 50% 111% 780,134 14.85
Premium
Eicher 1948 bikes (>250 90%
Royal
Motors CC)
Enfield
14,115 23,428 40% 12,460 13% 82% 389,694 18.46

Hero 1983
Two
37%
Extreme,
MotoCorp Wheelers Splendor

2,203 3,021 27% 1,475 49% 109% 436,950 11.74

Maruti 1981
Passenger
50% Maruti
Suzuki cars

5,029 7,759 35% 4,001 26% 143% 1,521,305 27.21

Tata Commercial
1945 44% Prima, Ace
Motors Vehicles
83 202 59% 64 31% 189% 287,843 0.00
 COMPARISON BETWEEN NIFTY 50 & AUTO INDICES

100
80.4636485634783

75

74.1672271360227
50

25

Auto Nifty 50
 FINANCIAL SERVICES- BABNKING and NBFCs
Gross non-food credit: INR 101 trillion (as on 31 January 2020)
• Break-up: Agriculture sector accounts – 13% Industry - 31.7% Services - 27.3%
Total deposits (SCBs): INR 132.1 trillion (as of 31 January 2020)
Credit deposit ratio (SCBs): 75.7% (2019)
Gross NPAs: 9.3% (as of Sep 2019)
Net NPAs: 3.7% (as of Sep 2019)

Current and potential impact on the sector

• Banks profitability
• Fall in transaction banking income
• Risk of defaults
• Increase in stressed assets
 COMPARISON BETWEEN NIFTY 50 & FINANCIAL SERVICES
INDICES
120

100

80

60

40

20

0
0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0
b -2 b-2 b-2 b-2 b-2 b-2 b-2 b-2 b-2 b-2 r-2 r-2 r-2 r-2 r-2 r-2 r-2 r-2 r-2 r-2 r-2 r-2 r-2 r-2 r-2 r-2 r-2 r-2 r-2 r-2 y-2 y-2 y-2 y-2
a a a a a a a a a a a p p p p p p p p p
Fe Fe Fe Fe Fe Fe Fe Fe Fe Fe M M M M M M M M M M M -A -A -A -A -A -A -A -A -A Ma Ma Ma Ma
1- 4- 6- 10- 12- 14- 18- 20- 25- 27- 2- 4- 6- 11- 13- 17- 19- 23- 25- 27- 31- 3 8 13 16 20 22 24 28 30 5- 7- 11- 13-

Financial Services Nifty 50

 AVIATION & TOURISM
Sector contribution to GDP and employment: Aviation - ~2.4% (FY18), Tourism -
~9.2% (FY18) and 14% of GDP (FY19). They employ a total of 50.97 million people
in 2018 – 19.
Key destination countries: China, Middle East, South East Asia, Germany, U.S. and
U.K.
Key states for tourism: Maharashtra, Kerala, UP, Ladakh, Gujarat, Tamil Nadu,
Rajasthan, Goa.
Current and potential impact on the sector

• Price variations
• Cash flow constraints
• Job Loss
• Lockdown/restrictions impact
 REAL ESTATE & CONSTRUCTION
Sector contribution to GDP and employment: Real Estate - 9% and
employs around 51m people

• Poor Demand
• Consumer sentiment
• Work From Home
 COMPARISON BETWEEN NIFTY 50 & REALTY INDICES

120

100

80

60

40

20

0
0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0
b -2 b-2 b-2 b-2 b-2 b-2 b-2 b-2 b-2 b-2 r-2 r-2 r-2 r-2 r-2 r-2 r-2 r-2 r-2 r-2 r-2 r-2 r-2 r-2 r-2 r-2 r-2 r-2 r-2 r-2 y-2 y-2 y-2 y-2
a a a a a a a a a a a p p p p p p p p p
-Fe -Fe -Fe -Fe -Fe -Fe -Fe -Fe -Fe -Fe -M -M -M -M -M -M -M -M -M -M -M 3-A 8-A -A -A -A -A -A -A -A -Ma -Ma -Ma -Ma
1 4 6 10 12 14 18 20 25 27 2 4 6 11 13 17 19 23 25 27 31 13 16 20 22 24 28 30 5 7 11 13

Realty Nifty 50
 PHARMACEUTICALS
• Market size and Employment: USD 55bn (2019 – 20)
and it employs 2.7 million people (Direct and Indirect)

Positive Negative
• Lockdown/restrictions • Price variations of key
impact raw materials
• Increased Exports • Production shutdown
• USFDA’s Quick • Labour force
Approval
 TOP COMPANIES IN THE PHARMA SECTOR

Product Down Up
Categor Market 52wk High From 52wk from Market
Company Year y Share CMP ₹ ₹ High ₹ Low ₹ Lows Beta Cap ₹ PE

Chronic
Sun Pharma 1983  
segments
452.20 504.80 10% 312.00 45% 50% 1,094,817 27.26
64 brands
Lupin Ltd 1968 of  
Generics 841.95 906.00 7% 504.75 67% 46% 380,215 0.00

Diagnostic
Dr. Lal 1949 35%
s chain
PathLabs Ltd 1,575.05 1,830.00 14% 955.00 65% 52% 127,250 54.23

Hepatitis C
Natco 1981 58%
vaccine
Pharma Ltd 617.05 738.10 16% 402.55 53% 94% 109,050 22.36
 COMPARISON BETWEEN NIFTY 50 & PHARMA INDICES

120

100

80

60

40

20

0
0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0
b -2 b-2 b-2 b-2 b-2 b-2 b-2 b-2 b-2 b-2 r-2 r-2 r-2 r-2 r-2 r-2 r-2 r-2 r-2 r-2 r-2 r-2 r-2 r-2 r-2 r-2 r-2 r-2 r-2 r-2 y-2 y-2 y-2 y-2
a a a a a a a a a a a p p p p p p p p p
-Fe -Fe -Fe -Fe -Fe -Fe -Fe -Fe -Fe -Fe -M -M -M -M -M -M -M -M -M -M -M 3-A 8-A 3-A 6-A 0-A 2-A 4-A 8-A 0-A -Ma -Ma -Ma -Ma
1 4 6 10 12 14 18 20 25 27 2 4 6 11 13 17 19 23 25 27 31 1 1 2 2 2 2 3 5 7 11 13

Pharma Nifty 50
 FMCG & RETAIL
• Sector contribution to GDP and employment: Retail – 10% of GDP and 8%
of employment.
• Major segments: Household and personal care (50%), healthcare segment
(31%), and food and beverages (19%).
• Major Applications are as follows: Household Use, Commercial Use,
Restaurant, Bar & Other

Positive Negative
• Surge in demands Panic • Risk of Losing Brand
buying Loyalty
• Profit Margin • Lack of Manpower:
 TOP COMPANIES IN THE FMCG SECTOR

Current 52Wk
Company Year Category Market Share Brands Prices 52 Wk High Down Share Up Beta MarketCap PE

Colgate,
Colgate-Palmolive 1937 Oral care 55% Cibaca, Max
fresh
1,340 1,641 18% ,065.20 26% 44% 360,082 45.55

Zandu,
Emami Ltd 1974 Antiseptic cream 50-70%
Boroplus
191 383 50% 130.95 45% 105% 83,116 24.78

Mach3,
Gillette India Ltd ( 1984 Razor and blades 45%
Vector
4,817 8,200 41% 4,420.00 9% 28% 158,102 67.61

Dove,
Hindustan Unilever Ltd 1933 Shampoo, soaps 35-50%
Lifeboy, Lux
2,024 2,614 23% 659.05 22% 23% 4,688,951 64.29

Classic, Gold
ITC Ltd 1910 Cigarettes 80%
Flake
163 310 48% 134.60 21% 78% 2,033,135 14.05

Marico Ltd 1988 Edible oil 40-70% Saffola

314 404 22% 234.00 34% 38% 396,093 40.13

Instant noodle, Maggi,

Nestle India Ltd 1912
coffee
45-97%
Nescafe
16,369 18,370 11% 9,966.21 64% 50% 1,592,050 79.93
 COMPARISON BETWEEN NIFTY 50 & FMCG INDICES

120

100

80

60

40

20

0
0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0
b -2 b-2 b-2 b-2 b-2 b-2 b-2 b-2 b-2 b-2 r-2 r-2 r-2 r-2 r-2 r-2 r-2 r-2 r-2 r-2 r-2 r-2 r-2 r-2 r-2 r-2 r-2 r-2 r-2 r-2 y-2 y-2 y-2 y-2
a a a a a a a a a a a p p p p p p p p p
-Fe -Fe -Fe -Fe -Fe -Fe -Fe -Fe -Fe -Fe -M -M -M -M -M -M -M -M -M -M -M 3-A 8-A 3-A 6-A 0-A 2-A 4-A 8-A 0-A -Ma -Ma -Ma -Ma
1 4 6 10 12 14 18 20 25 27 2 4 6 11 13 17 19 23 25 27 31 1 1 2 2 2 2 3 5 7 11 13

FMCG Nifty 50
What Measures should be taken?
 IS IT THE RIGHT TIME TO BUY SHARES AMID FALLING
MARKET?
• So, is it the right time to buy shares amid falling market?
• Well, if you look at the history of Viruses and Stock Market, you will know
that as soon as the virus is contained, the stock market bounces back
quickly.
• Remember SARS virus in 2003? or even Ebola virus in 2014? Well, stock
market moved on from all these threats.
• Pigeon experiment:
• So, when will we move on from Corona Virus? Well, that is
something which is uncertain.
• All one needs to do is play cautiously. One shouldn’t
invest all his money but should invest like an SIP. And
should do their own research instead of listening to
someone specially the guys on TV.
 THANK YOU

Any Questions

status: confidential