Sectors affected: Coronavirus poses a crisis.

Coronavirus has proven to be deadly, not only for humans but for the economy as well. Many sectors have been badly affected by the pandemic and the lockdowns that followed. It is global and hence the consequences are expected to be catastrophic. Many speculations have been made already along with some grave predictions about the global economy. But I think we will learn of the full impact when we cross that bridge gradually. When the virus infected China, the manufacturing slowdown gravely affected the Indian market. And it has only worsened then on.

Markets in Wuhan. Slowdown observed in these sectors.

A new report on the pandemic analysis has brought into light the affected sectors. It is known that the banking, retail, real estate, and auto sectors are the worst hit. The majority of the population has been indoors owing to the nationwide lockdown. inevitably, the economic growth took a major hit as various sectors face crippling financial stress. 

A report by DSP Investment Managers has pointed out that supply constraints have put a major damper on the sectors like retail and property. Additionally, the banking sector has been impacted by subdued loan growth. 

Here is the summary of the impact of the pandemic on different sectors:

BANKING: A DSP Investment Managers report said that more than 20%+ earnings have been cut across financiers in FY21. Coronavirus has also significantly weakened loan growth. Bad loans are on the rise, especially in the retail sector. The report also suggested gains in the market shares of NBFCs as well as large private banks.

RETAIL: In the retail sector, apparel is hit the worst. Food retailers follow apparel on the list. People have stopped eating out, obviously. But keeping in tune with a precautionary feel, many avoid ordering in as well. Hence the food retailers such as restaurants and cafes have taken some serious damage. Groceries and vegetable vendors, on the other hand, are the least affected of all. Other retailers will suffer huge revenue losses in the coming days. 

Many garment or textile factories in China have halted functions due to the pandemic outbreak. This has, of course, adversely affected exports of raw materials from India. Hence, it has hampered trade by a lot

REAL ESTATE: Though commercial segments are thought to be impacted the least, the residential sector isn’t as lucky. The residential sector might take a long time to recover from the stress of the pandemic. Clients would not be in a position to pay and hence have to forgo the rentals. Sales could be deferred ad this could be stretched due to reduced income levels. 

AUTO: The auto sector had been hit badly last year as not many people indulged in buying cars and bikes. And how can they after the economy took a nosedive? As personal savings decreases and expenditures increased, people thought it best not to take loans and do any kind of personal shopping. Still, there was some hope of gradual recovery in the auto sectors in FY21. But now, even that hope seems bleak. The recovery of auto sectors is expected to happen in FY22. All companies would be involved in cutting their expenses and expenditures. 

There are other sectors that will also suffer a crippling impact. IT, NBFCs, textiles, capital goods are expected to go down. Additionally, cement, construction, hospitals, OMCs, gas, exploration & production, and metals will also take a hit.

We will keep you updated as and when the numbers come in! Keep reading, stay home, and stay safe.