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Navigating the COVID-19 crisis: Ensuring
business sustainability and growth in an
uncertain environment
Lubricants sector
May 2020
02
Navigating the COVID-19 crisis: Ensuring business sustainability and growth in an uncertain environment
Contents
Plausible scenarios  03
	 The situation and the challenge  03
	 The unknowns 04
	 Why scenarios  05
	 Scenario framework for the COVID-19 situation 06
	 Possible consequences on India's overall outlook 09
Impact on the lubricants ecosystem  11
	 Impact of COVID-19 on the Indian lubricants ecosystem 11
	 Implications for the Indian lubricants ecosystem 13
	 What should companies do to manage the crisis? 17
End notes 19
Contact us 20
Acknowledgements20
02
Navigating the COVID-19 crisis: Ensuring business sustainability and growth in an uncertain environment
03
Navigating the COVID-19 crisis: Ensuring business sustainability and growth in an uncertain environment
The situation and the challenge
The COVID-19 pandemic has pushed humanity and the global
economy into a crisis not seen since ‘The Great Depression’.1
Due to the high infection rate and impact on public health
systems, governments have enforced nationwide lockdowns,
thereby significantly impacting agricultural harvesting and
production, manufacturing supply chains, trade, services, and
how people work and enjoy.
This development is disrupting value chains, communication,
and co-operation amongst business ecosystems, significantly
affecting livelihoods. Moreover, it is difficult to
estimate when these lockdown/staying at home norms
(applicable to ~50 percent of the world’s population)2
would
be relaxed completely, resulting in even more uncertainty
about the future of many of these affected businesses.
In these uncertain times, companies seek clarity on what
could constitute a robust strategy to deal with short- to mid-
term implications (6–24 months) stemming from COVID-19.
Companies are facing challenges due to the following:
Increasing volatility of
business environments
Excess information,
untrustworthiness
of sources, and
ambiguous
interpretations of
information leading
to possibly wrong
assumptions
Interconnectedness
and unpredictability of
influencing factors
Unpredictable government
interventions shaped by
different interest groups
Presence of increasingly
global demand and supply
chains
Plausible scenarios
04
Navigating the COVID-19 crisis: Ensuring business sustainability and growth in an uncertain environment
The unknowns
The first step towards identifying the short- and mid-term
outcomes of COVID-19 for business environments and
building out strategies to prepare for them is to identify
the unknowns that have the potential to influence these
outcomes.
The unknowns may revolve around changes in the family
unit/society, such as values, ethics, and ways of working
(e.g., need for social distancing, role of altruism). They could
also be around economic impact of the pandemic on the
society at large (e.g., loss of jobs, pay cuts, realignment of
expenses), efficacy of healthcare response (e.g., healthcare
policy and hospital response) and structure and integrity
of processes and systems within companies (e.g., ability
to digitise work processes, while ensuring data security,
supply chain ability). There may also be uncertainty in the
way governments respond and take actions to manage
the crisis and how the corporate landscape shapes up,
including permanent shifts in customer demand, flexible
employment models, employee’s social security, etc.
Additionally, uncertainty also exists in the manner in which
people react to the crisis, including development of support
systems, perspectives on what is safe and not safe, changing
immediate and long-term priorities, etc. Figure 1 illustrates
the unknowns across key dimensions that are applicable for
most industries in India, and are likely to play a crucial role
in shaping the picture of next 6–24 months. Out of these, the
following are the four ‘biggest’ unknowns:
How good will policy makers/ local
government machineries be at keeping the
‘lights-on’ and responding in a lean and agile
manner to a changing environment?
How long will the pandemic
last? Will a vaccine/robust
treatment protocol become
available?
For how long will
controls on free
movement of people
and goods last?
How pervasive
will the knock-on
effects be?
Family/society related Corporate/MSME related Healthcare policy/Government/economy related
Governance Financial structure/markets
Cohesion of the society
Everybody
for
themselves
Reemergence
of the tribe
Resilience of supply chains
and related ecosystems
Systemic
breakdown
Painful but
resilient
Cooperation amongst state and
central governments
Mistrust Cooperation
Mobility of people and goods
Sustained
isolation
Temporary
interruption
Enforcement of COVID-19
business regulations
With force
With
measure
Efficacy of healthcare response
Uncontrolled
spread
Sustained
containment
Information transparency
Complete
confusion
Regular data
dissemination
Nature and speed of government
intervention
Reactive;
limited
Proactive;
significant
Efficacy of company
digitalisation
Incremental
initiatives
Radical
rethink
Global corporate investment
appetite
Cautious
Now more
than ever
Supply of workforce
Shortage Abundance
Family and social security
Major
impact
Limited
impact
Rebound of consumption
Not
perceivable
Immediate
Global trade flows
Shattered
forever
Back to
normalcy
Financial market volatility
Financial crisis Stabilisation
Figure 1. Key unknowns in the future of COVID-19 business environments
Source: Monitor Deloitte analysis
Debt in the system
Long-term
increase
Back to
normalcy
Liquidity in the system
Major concern Limited impact
05
Navigating the COVID-19 crisis: Ensuring business sustainability and growth in an uncertain environment
Why scenarios
Decision makers face formidable challenges, as taking the
long view has never been harder. They have to make the
best possible judgement calls every day while the world
continues to be uncertain, volatile, and ambiguous. One
way is to develop robust and strategically relevant scenarios
that respond to, and take advantage of the many plausible
outcomes for the future.
While predicting the future is impossible, anticipating
plausible scenarios in these circumstances is even more
robust than predicting traditional forecasts for the
most optimal future—preparing for a reasonable
‘worst-case’ scenario rather than a simple extrapolation
exercise. In contrast to forecasting, scenarios examine
what is most uncertain and surprising, as a mechanism
to generate insight and provoke action regarding future-
focused risks and opportunities. Scenarios are a tool to
uncover blind spots and broaden perspectives about
alternative future environments in which today’s decisions
might play out.
06
Navigating the COVID-19 crisis: Ensuring business sustainability and growth in an uncertain environment
Scenario framework for the
COVID-19 situation
Monitor Deloitte’s proprietary scenario planning process
begins with defining the focal question that captures the core
issue to be explored through the scenarios. In the current
circumstances, we identify the focal question to be—‘How will
the future of COVID-19 affected business environments
shape up in India? What will be the impact on the
lubricants sector?’
Having identified the major unknowns that may impact the
future business environments, we proceed to identify the
two most critical uncertainties—the unknowns that are
most relevant and have the most potential to define future
scenarios. Based on our analysis and findings, the ‘Extent and
Speed of Government Economic Policy Support, Stimuli and
Execution’ and the ‘Efficacy of Healthcare Response’ are the
most critical uncertainties in the present situation (Figure 2).
‘Extent and Speed of Government Economic Policy Support,
Stimuli and Execution’ measures the economic response level
from the government and related bodies (including Reserve
Bank of India, Ministry of Commerce and Industry, NITI Aayog,
Securities and Exchange Board of India, etc.). It would cover
Figure 2. Critical uncertainties and their endpoints
Uncontrolled spread
•	 Slow progress in rolling-out a robust
testing protocol across the identified
‘hotspots’
•	 Inability of the administration to elicit
support from populace towards adherence
of self-quarantine and social distancing
norms
•	 Inability to manage regular and timely
dissemination and implementation of
treatment protocols
•	 Inability to build/mobilise the required
hospital infrastructure and capacity to
triage, isolate, and treat those affected
Reactive and limited
•	 Lack of decisive measures to stabilise
the economy with a significant infusion of
liquidity into the banking system
•	 Inefficient transmission of financial aid
to small businesses, MSMEs, and daily-wage
workers dependent on regular cash flow
•	 Inefficient management of efforts to
drive consumption and jumpstart sectors
within the economy, which were most
affected by this pandemic
•	 Inability to translate policy into easily
implementable measures to ensure
smooth movement of goods and services
Sustained containment
•	 Speedy, targeted, and scaled roll-out of a
robust testing protocol across the identified
‘hotspots’
•	 Effective combination of ‘carrot and stick’
approach to ensure wide-spread support
from populace towards adherence of self-
quarantine and social distancing norms to
‘flatten the curve’ and prevent any recurrence
of the infection
•	 Timely adoption of treatment protocols and
centrally coordinated, scaled and consistent
dissemination across the healthcare network
•	 Availability of adequate hospital
infrastructure and capacity within key
hotspots to triage, isolate, and treat those
affected across multiple infection waves
Proactive and significant
•	 Measured and timely intervention by the
central bank to infuse adequate liquidity to
drive consumption
•	 Government-funded downturn
compensation for MSMEs and daily-wage
workers
•	 Reforms to drive consumption, capture any
emerging export opportunities, provide fiscal
breaks or incentives; short-term working
capital support to keep industries afloat
•	 Coordinated interventions to smoothen
policy implementation to enable movement
of goods and services
Source: Monitor Deloitte analysis
Efficacy of
healthcare
response
Extent and
speed of
government
economic policy
support, stimuli,
and execution
07
Navigating the COVID-19 crisis: Ensuring business sustainability and growth in an uncertain environment
Time Time
Economicgrowth
Economicgrowth
Long-term
disruption;
severe,
permanent
loss
Medium-term
disruption;
significant,
recurrent loss
Scenario 3: The L-Curve Scenario 4: The W-Curve
Scenario 2: The U-Curve
Medium-term
disruption;
significant,
contained loss
Economicgrowth
Time Time
Economicgrowth
Short-term
disruption;
moderate,
contained loss
Scenario 1: The V-Curve
Short term
Comparison with Deloitte Scenarios
Source: Monitor Deloitte analysis
Medium term Long term
fiscal stimulus, supporting impacted industries, keeping job
losses to a minimum, providing credit to Micro, Small and
Medium Enterprises (MSMEs), injecting liquidity to drive
consumption, etc., and ensuring effective, efficient, and timely
execution. ‘Efficacy of Healthcare Response’ measures the
extent to which pandemic spread can be controlled through
healthcare measures, including robust testing and treatment
protocols, social distancing, lockdowns, and availability of
adequate hospital infrastructure. It includes initiatives taken
by Indian Council of Medical Research (ICMR), hospitals,
and related bodies. While the former set of interventions is
more likely to create a ‘push’ in the economy, the latter set of
interventions would help create a ‘pull’ from the consumer’s
end.
The uncertainties, along with their two extreme end points
when superimposed, give rise to four plausible scenarios of the
future.
These scenarios can be mapped directly to Deloitte’s
proprietary COVID-19 scenarios being short-, medium-, and
long-term disruptions and are described in Figure 3.
Uncontrolled
Spread
Sustained
containment
Figure 3. The four plausible scenarios of the future Efficacyofhealthcareresponse
Proactive and
significant
Reactive and
limited
Extent and speed of govt. economic policy support, stimuli, and execution
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Navigating the COVID-19 crisis: Ensuring business sustainability and growth in an uncertain environment
Scenario - 2
The U-Curve (Medium-term disruption) The virus’ spread is contained but not supported by adequate/timely economic
stimulus to support failing businesses. Structural damage to the economy impacts the fundamental dynamics of many
industries, and the consumer confidence gets affected resulting in long-lasting effects followed by slow and muted recovery.
Scenario - 3
The L-Curve (Long-term disruption) The virus continues to spread and cause disruption globally and in India. Improper
healthcare response coupled with inadequate economic stimuli leads to major structural damage to the economy and long-
term recession; there is permanent loss of output as firms go bankrupt and employment, production levels, and consumer
confidence take a long time to revive.
Scenario - 4
The W-Curve (Medium-term disruption) The virus continues to spread, but strong policy response keeps the economic
growth afloat; recurrences of the pandemic are seen, but businesses adapt through mini-recoveries, coupled with rising
consumer confidence, head towards a slow, near-complete recovery.
Scenario - 1
The V-Curve (Short-term disruption) Successful containment of the virus, supported by strong policy response prevents
permanent structural damage; returning consumer confidence coupled with an agile response by businesses after removal of
restrictions results in sharp recovery.
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Navigating the COVID-19 crisis: Ensuring business sustainability and growth in an uncertain environment
Possible consequences on India's
overall outlook
Out of the four scenarios, we believe that either of Scenarios
2 or 4 are the more likely manifestations in the Indian
context. In other words, participation of the government
through policy support, adequate stimuli, and robust
execution to support the economy in a comprehensive
manner may step-up, as the contagion continues to spread
and affect larger sections of the society without any signs of
relenting. This section narrates the ‘scenario stories’ that are
likely to pan out.
The U-Curve: The pandemic continues to spread globally
for a prolonged period. It infects ~0.5 million of India’s
population by the end of 1.5 years, but with a low infection
fatality rate. The restrictions on movement remain stringent
until the end of 2020, with varying degrees of relaxation
introduced for different businesses, and strict directives to
maintain hygiene and social distancing norms. The impact
of the pandemic remains for over two years, with a slow,
tenuous recovery beginning only in FY2022, and remaining
modest for the next four quarters. Across the globe, the
recovery is unsynchronised with the Asian economies
recovering faster.
Global supply chain disruptions cause stress on several
industries that depend on imported raw materials, with
some disruptions lasting for over six quarters before
seeing any signs of recovery. The most impacted industries
are likely to see prolonged liquidity crunch, restricted
working capital, and reduction in production capacity due
to withdrawal by investors and pressure from debtors.
This may result in delayed supplier payments and several
businesses filing bankruptcy, necessitating intervention by
the government in the form of additional stimulus.
On the demand side, high unemployment, increased
household debt, and lengthier lockdowns continue to
impact consumer demand for goods and services, with
most consumers putting off big-ticket purchases, such as
automobiles, home purchases and renovations for the
long term and significantly changing entertainment/leisure
preferences. Even after the pandemic dissipates, consumers
continue to be wary of major expenses and instead opt to
increase their savings. Pent-up demand is likely to break
through eventually, reviving well towards the end of FY2022.
The impact on financial health of businesses is likely to be
significant, MSMEs default in large numbers, and big firms
delay debt payments leading to an extreme financial crisis.
As a result, capital markets shed off over a decade’s worth
of gains, and liquidity dries up in short-term money market.
Several small banks come under significant stress as the
money market goes dry and margins fall. In such a scenario,
few choose to consolidate with larger banks. The reduction
in policy rates to maintain liquidity leads to inflationary
pressures coinciding with rising pent-up demand. Overall,
the country sees sub three percent growth for at least
the next six to eight quarters, after which it slowly
heads towards recovery.
The W-Curve: In India, the virus infects ~0.75 million people
over the next 1.5 years, but with lesser infection fatality
rates than the global average. Movement restrictions
continue to remain stringent, with major ‘hotspots’ locked
down for over two quarters with varying degrees of
restrictions. Businesses gradually resume operations in
a phased manner, with continued emphasis on ensuring
high standards of hygiene at workplaces. The impact of
the ongoing slowdown is felt for the next three to four
quarters, with recovery observed during the second half
of FY2022. A higher likelihood of multiple subsequent
outbreaks exists with the discovery of vaccine-resistant viral
strains, but these are met by much better preparation and
contingency plans by all the stakeholders—the government,
the businesses as well as the populace. Full-fledged
and synchronised recovery is seen from Q3 FY2022, as
governments across the world enforce decisive policies to
effectively ‘flatten the curve’ and minimise the impact on the
economy.
Supply chain disruptions cause stress on several industries
that are dependent on Chinese imports, as they strive to look
at alternate supply sources. This creates an
opportunity for Indian manufacturers, who look to build
capabilities to indigenise production, reduce import
dependence, and present the world with an alternative source
for products. However, for this to materialise, industries
10
Navigating the COVID-19 crisis: Ensuring business sustainability and growth in an uncertain environment
and the government must collaborate to set up the required
infrastructure. Several industries endure severe slowdown
and liquidity crunch for ~ three to four quarters. However, the
government that plays a proactive role in ensuring smooth
running of the economy, bails out/supports these industries
through timely macro- and micro-interventions.
On the demand side, high unemployment, piling household
debt, and lengthy lockdowns impact consumer spending
until the end of 2020. There is a lag of three to four
months observed in demand recovery post the removal
of restrictions as people still fear falling sick. As a result,
spending picks up in early FY2022, largely driven by pent-up
demand, and recovers to near-2019 levels by mid-FY2022.
Financially, poor credit demand and collections results
in worsening of Indian banks’ balance sheet, with Non-
Performing Assets (NPAs) jumping up to double digits.
However, stress on the economy starts reducing after policy
impact on demand and the positive impact of financial
stimulus to manufacturing industries is felt from FY2022.
As a result, the first wave of economic recovery begins
in three to four quarters, potentially followed by a longer,
but less painful period of recurrent bouts of slowdown.
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Navigating the COVID-19 crisis: Ensuring business sustainability and growth in an uncertain environment
Impact of COVID-19 on the Indian lubricants ecosystem
Let us now discuss the likely implications of the COVID-19
pandemic on the Indian lubricants ecosystem (including
raw material suppliers, lubricant players, contract/toll
manufacturers, channel partners, and customers).
A significant slowdown in transportation and the movement of
people has been seen due to the lockdown. Transportation of
goods has been severely curtailed as distribution chains have
almost come to a halt. Overall traffic for goods and people
(both work and recreation) in India has seen about ~55–60
percent reduction on average from the baseline.3
Fuel demand
in India fell by 60 percent for the first fortnight of April.4
It is further possible that in both the W- and U- Curve
scenarios, traffic is likely to see a significant reduction over the
next four to eight quarters (depending on the scenario). Given
the reduction in movement of commercial vehicles, the lube
change intervals are expected to increase during this period.
For passenger vehicles, the impact on lube change intervals
is likely to be even more severe, with journey cycles changing
drastically due to Work From Home (WFH) measures.
This situation is likely to be exacerbated further due to
existing issues in the auto sector (even prior to the pandemic
and the lockdown). The allied auto sector has already been
under considerable stress over the past 12–18 months due to
both cyclical and structural changes. Apart from the cyclical
changes, the structural changes have had a major negative
impact on the sector—demonetisation, Goods and Services
Tax (GST), liquidity crunch, shift to shared mobility, Axle load
reform, BS-IV to BS-VI, etc.
In addition, industrial activity in the lockdown period has
shrunk. This has the potential to impact sales of various types of
industrial lubricants, including transmission and hydraulic oils,
metal working fluid, industrial gear oils, turbine oils, compressor
oils, greases, agri-spray oils, other industrial lubes, etc. These
lubricants are used across various industries, such as power,
construction, metals and mining, iron and steel, chemicals,
cement, railways, oil and gas, general manufacturing, etc.
Considering that most of these industries have been impacted
due to the lockdown, it is expected that the demand for industrial
lubricants will also get impacted going forward. Figure 4 highlights
the impact on a few of these industries.
Figure 4. Impact on key industries
Source: News articles, Monitor Deloitte analysis
Construction
Power
Iron and
steel
Cement
Railways
Impact on the lubricants
ecosystem
~25% fall in peak
demand5
Complete lockdown6 10–20% demand contraction in
FY20218
Complete shutdown
of passenger traffic9
~8% fall expected in 20207
12
Navigating the COVID-19 crisis: Ensuring business sustainability and growth in an uncertain environment
As a result, stakeholders across the lubricants ecosystem are
facing a prolonged slowdown. Base oil and additive suppliers
have seen demand destruction across nearly all lubricant
sectors, which is expected to put pressure on margins. The
drastic fall in crude oil prices would only have a limited impact,
since the key reason for fall in prices is lower demand across
the value chain and further, lubricants are typically not in
complete sync with crude oil prices. Hence, until demand
recovers, lubricant players are likely to face headwinds in spite
of lower crude prices.
Packaging material suppliers have also faced issues due to
their inability to deliver inputs during the lockdown.
Although refineries and additive manufacturing plants
have reduced their throughputs due to a fall in demand, the
lockdown does not drastically affect their ability to continue
running. However, major ports are facing issues due to
congestion caused by stakeholders halting operations for the
duration of the lockdown. Similarly, transporters responsible
for moving goods are facing issues. Labour at many ports as
well as loaders at logistics hubs and raw material plants consist
of a significant number of migrant workers who have returned
to their hometowns, affecting operations. This can lead to raw
material shortages at the plants.
Lubricant manufacturers (including toll manufacturers) are
facing problems with operations. Apart from the inventory of
inputs needed to keep plants running during the lockdown,
manufacturing and movement of stock is highly dependent
on contract labourers who are currently unavailable. Going
forward, especially toll/contract manufacturers are likely to
face working capital issues due to a reduction in the movement
of stock. Such manufacturers will likely be the first to stop
production, as they have to continue to pay some of the factor
costs. This is expected to hamper operations in the mid-term.
Channel partners are facing a drastic reduction in demand
due to the lockdown. This has led to increased inventory levels
with all channel partners and an inability to clear stocks. In
addition, most of these partners are also de facto financiers
for the commercial and industrial lubricants market, providing
credit to keep the wheels moving. The destruction in demand is
likely to result in both, defaults and inability to roll credit. Bazaar
channel partners (~65 percent of the auto-lubricants market
and ~25 percent to 30 percent of the overall market) are the most
affected, and are likely to have severe working capital issues.
Industrial lubricant distributors have been significantly
impacted due to reduction in demand because of curtailment
of industrial activity, increased defaults due to closure of MSME
units, and increased credit requirements.
Independent workshops (~15 percent of the auto-lubricants
market) are facing similar issues on the demand front.
Auto Original Equipment Manufacturers (OEMs) (~20
percent of the auto-lubricants market) are under considerable
stress, with the industry almost at a standstill due to the
lockdown. Auto dealers have seen severe impact due to their
inability to deliver vehicles during this period. Most of the
dealers have 30–45 days of finished goods inventory. Further,
dealers risk having to take on significant burden on their
balance sheets to liquidate unsold BS-IV inventory, estimated
to be worth ~INR 6,300 crore.10
This has negatively affected the
demand for lubricant factory fills.
However, with the introduction of BS-VI, OEM first fills and
franchise workshops will need to stock up on BS-VI ready
lubricants, increasing lubricant demand in the short term.
The prolonged lockdown has also put tremendous strain on
the operations of other ecosystem players (mobility solution
providers, used-car players, and after-market service
providers) whose funding depends heavily on aggressive
revenue growth projections. Shared mobility players (ride
sharing, car sharing, ride hailing) may have to rethink their
offerings, as customers may likely end up preferring private
transportation modes that guarantee ‘social distancing’, at
least in the short term. This may have a positive effect on
lubricants demand in the future, due to the related rise in
personal vehicle sales.
13
Navigating the COVID-19 crisis: Ensuring business sustainability and growth in an uncertain environment
Implications for the Indian
lubricants ecosystem
As discussed, considering the magnitude and scale of the
COVID-19 pandemic, stakeholders across the lubricants
ecosystem need to prepare, plan, and follow a structured
approach to manage the crisis. While they may respond by
taking some actions immediately, they must also prepare in
advance to launch initiatives just after the lockdown ends
to recover and capture maximum value and any pent-up
demand.
In addition to these short- to mid-term actions, players also
need to respond to permanent disruptions that this pandemic
may have brought about (e.g., consumer behaviour) and
changed the very way businesses operate today, and ensure
that their businesses thrive with long-term interventions.
We discuss some areas (Figure 5) around which players need to
act so that they are ‘battle-ready’ for their quest to revive the
industry and their respective businesses, once the pandemic
subsides.
Respond
Considering the fact that India is already four to five weeks
into the pandemic, it is expected that most companies would
have already taken certain immediate steps to deal with the
crisis.
Given the uncertainty around the pandemic and
disruptions to traditional supplier and distributor chains,
companies need to communicate effectively and in a
consistent manner, solve any incidents and operational
risks expeditiously, manage the way forward, and develop a
contingency plan.
In addition, ensuring employee safety and well-being
(via continuous communication, tele-counselling, remote
working, health insurance, etc.) and changing ways of
working to engage with channel partners (including ensuring
adequate stock, financing support, new sales) are other key
imperatives.
Figure 5. Three-point action plan for companies
Respond
Immediate
(during the lockdown)
Recover
Mid-term
Thrive
Long-term
14
Navigating the COVID-19 crisis: Ensuring business sustainability and growth in an uncertain environment
Recover
Post the initial response and as the lockdown gets lifted
gradually, companies need to develop a comprehensive
strategy to return to the market and kick start the demand
engine. Such an effort should focus on the key geographies,
products, customers, channels, supply chain, and other go-to-
market elements (as highlighted in Figure 6).
Identifying initial geographies to start sales: Given the
varying severity of the pandemic across different regions
and the possibility of a staggered opening of the lockdown
(potentially starting with tier-2 and 3 cities, followed by major
metros and industrial centres) as done in China, companies
need to identify markets that are likely to open up first and
develop plans to service them (including filling up the pipeline
inventory, ability to retain or expand counter share, strengthen
the ability of channel to generate/ service institutional demand,
and any other enablers needed).
Ensuring product alignment with market needs: COVID-19 is
expected to have a varying impact on the Commercial Vehicles
(CVs), Passenger Vehicles (PVs), and two-wheeler segments,
in terms of existing vehicle usage and future sales. In such
a scenario, it is critical to identify which product segment is
expected to recover the fastest and focus manufacturing and
distribution in those areas.
Figure 6. Key elements of the ‘Recover’ phase for companies
Respond Recover Thrive
Identifying initial geographies to
start sales
Selection of geographies based on
staggered lockdown removal across the
country
Maintaining channel
health
Credit facilities to
distributors/wholesalers to
help manage WC issues
Ensuring efficient
allocation of marketing
spends
Adoption of zero-based
budgeting approach
Maintaining the supply
chain
Alternate sources to meet
demand
Developing detailed go-
to-market plans for post
lockdown
Collaborations, schemes,
incentives
Ensuring product alignment with
market needs
Lubricant manufacturing and
distribution, based on recovery and
needs of each sector
Identifying new channel partners
Replace existing partners that may
have gone out of business during the
crisis, disintermediation
Source: Monitor Deloitte analysis
Additionally, companies would also need to focus product
development on BS VI (based on government regulations) and
industrial lubes (based on any changes in consumer need and
demand). Companies should focus on high margin products
with continued demand in industrial lubes, such as food grade
lubricants.
Finally, it is possible that companies do not have the adequate
raw materials to manufacture all types of lubes (e.g., imported
inputs might be short). In such a situation, it is important to
evaluate which other grades can be made/tweaked to meet
customer demand in an effective manner.
Identifying new channel partners: Given the financial
strain the crisis has put on the channel, a strong possibility
that small counters/ distributors may not be able to survive
the crisis exists. Hence, companies need to proactively
identify opportunities to rationalise the channel and
identify new distributors or increase market coverage from
existing large and well-funded distributors. Companies may
also evaluate a different distribution model with greater
disintermediation or direct to consumer interventions.
Maintaining channel health: Given the fact that there is
inventory build-up and delay in revolving customer credit in
the channel due to reduced sales, distributors are likely to
15
Navigating the COVID-19 crisis: Ensuring business sustainability and growth in an uncertain environment
face severe working capital issues. Companies may need to
respond to this challenge by reviewing the channel partners’
role and the associated economics, including extending
credit to small-scale customers, distributors, and partners
with appropriate checks and balances. Some examples could
include releasing any pending incentive payments, providing
credit facilities in partnership with Non-Banking Financial
Companies (NBFCs), faster reconciliations, and reducing the
need for deposits, etc.
Ensuring efficient allocation of marketing spends: Most
companies have experienced a deep cut in their budgets
because of the pandemic and the slowdown. As a
result, companies should consider adopting a zero-based
budgeting approach to identify clearly which promotions
and schemes generate the maximum return and utilise the
limited budget in those areas. Key to this would also be to
re-look at the Above the Line (ATL)-Below the Line (BTL)
mix using analytical models and then judiciously directing
spends in those micro-markets and counters, which are
likely to give maximum benefit keeping in mind competition
strengths.
Maintaining the supply chain: Another key implication
of a staggered rollout is the possible delay in opening of
lubricant blending facilities/raw material suppliers located in
industrial areas, which may still be under lockdown. In such
a situation, companies may need to look at alternate toll
manufacturers and raw material sources proactively, so that
sufficient stocks are in place to deal with pent-up demand.
This may also have an implication on the products that could
be manufactured (keeping in mind intellectual property
restrictions related to product formulations). Companies
would also need to relook at the distribution network and
related linkages in the short/medium term to factor in need
to maintain high service levels during the staggered roll-out
period.
Developing detailed go-to-market plans for post lockdown:
Companies need to be ready to capture the demand when the
market opens. This would involve creating detailed plans on all
the above areas for each micro-market, realigning sales and
supply chain efforts to the focus markets, launching various
schemes in collaboration with the ecosystem, appropriately
incentivising the sales team, and finding new ways of customer
engagement (including service at home, loyalty programmes,
digital apps, etc.).
Thrive
The themes and the illustrative responses mentioned
are expected to help lubricant companies prepare for an
expected U-shaped recovery. It is essential to note that this
16
Navigating the COVID-19 crisis: Ensuring business sustainability and growth in an uncertain environment
expectation is built on the prevailing condition of the industry,
an understanding of the pandemic’s likely spread, the time it
takes for containment, and the impact of these events on the
industry specifically. However, the behaviour of the virus in
reality (development of more robust strains vs. development of
robust treatment protocols and vaccine) and the time it takes
to contain the spread (four quarters vs. more than six quarters)
are factors that are difficult to predict with any amount of
certainty.
Hence, it is possible that the sector may head towards an
even more prolonged W-shaped recovery instead, wherein
a second bout of the pandemic follows the initial remission.
Companies must look to identify the onset of such a
scenario by tracking and observing certain leading indicators.
This would help them to be well- prepared to respond to
the second wave and minimise both financial losses and the
ensuing structural damage to the value chain.
Additionally, it is critical to review how the situation unfolded
in countries that were ahead of India in the COVID-19 curve,
such as China and South Korea. Some of the indicators to
understand which scenario plays out are listed below:
•	 	Government support and economic stimulus packages (as
percent of GDP)
•	 	Traffic data in key markets as a surrogate for fuel
consumption
•	 	Change in infection rates and infection fatality rates
•	 	Change in number/status of infection ‘hotspots’
•	 	Reinforcement/continuation of lockdown norms, especially
in large cities, etc.
•	 	Reports of recurrent waves in other economies
•	 	Port cargo congestion handling data for key ports
•	 	Success rates of different treatment protocols for COVID-19
•	 	Delay in the development of a vaccine/discovery of alternate
robust strains of the virus
•	 	Frequent violation of social distancing norms in key markets
While the initiatives discussed for the U-shaped recovery
remain valid even in the W-shaped scenario, companies must
prioritise tactics needed to secure their supply chains and
develop trigger-based micro-work plans in partnership with the
network to ensure adequate response as the situation evolves.
Such a response would need to account for changing
preferences of customers with regards to mobility, focus on
the hyper-local model, shift from products to a products- and
services-based model, adoption of an ecosystem/partnership
based approach, increased focus on digital, and redesign of
manufacturing and supply chain architecture.
17
Navigating the COVID-19 crisis: Ensuring business sustainability and growth in an uncertain environment
What should companies do to
manage the crisis?
Companies need to draw up specific multi-disciplinary plans
to help ‘recover’ from the crisis, and ensure business growth
and sustainability as the pandemic subsides. As a starting
point to this exercise, companies must set up a GRowTH office
(Gain, Recover, Thrive). This would typically be an extension
of the COVID Crisis Command Centre, that most companies
would have set up in the immediate aftermath of the pandemic
to ‘respond’ to any operational risks or issues, and ensure
employee well-being.
A GRowTH Office (Office) is made up of a three to four member
cross-functional team, which reports directly to the CEO or
Management Committee. The structure of such an office is
highlighted in Figure 7.
Supply chain
•	 Availability of all inputs
(incl. imported) to continue
production?
•	 Ensuring functional supply chain
that minimizes stock outs?
Manufacturing operations
•	 Ensuring product mix is in
line with changing market
conditions?
•	 Managing production in
case plant location is a
COVID hotspot (e.g., via toll
manufacturers)?
Marketing
•	 Managing change in media
consumption habits of
customers?
•	 Providing special promotions/
schemes to customers to
capture pent-up demand?
Technology  Digital
•	 Virtualization to enable traditional
offline processes and systems to
operate digitally?
•	 Utilizing digital interventions across
the value chain via start-ups to
rapidly scale-up (incl. apps, cloud,
video, etc.)?
•	 Developing bespoke demand and
price forecasting tools, operational
control towers to manage decision
making in micro markets?
Talent
•	 Ensuring employee well-
being and any special
benefits/ policies?
•	 Maintaining high employee
morale, while working in a
crisis scenario?
Sales
•	 Gauging health of channel
partners (incl. need for
financing)?
•	 Understanding need for
additional distributors/
ecosystem partnerships?
•	 Developing detailed GTM to
kick start demand engine
post lockdown?
Meeting cadence
•	 Weekly meetings with CEO/
Management Committee
on key updates and any
functional/ business issues
•	 Weekly problem solving
meetings with business/
functions
Roles
1
Develop a plan for the CEO/ Management Committee
to manage the COVID crisis and ensure business
sustainability and growth
2
Evaluate changing situation and emerging scenarios,
based on various leading indicators and update CEO/
Management Committee on the same
3
Work with business/ functional leadership to roll-out
specific tactics in line with evolving business scenario
Figure 7. Key focus areas for GRowTH Office
Core
team (3-4
membercross-
functional
teamreporting
to senior
management)
Sensing and trackin
g
Source: Monitor Deloitte analysis
18
Navigating the COVID-19 crisis: Ensuring business sustainability and growth in an uncertain environment
The Office has the following three key roles:
1.	 As part of the first role, the Office would prepare a detailed
plan to manage the crisis and ensure business sustainability
and growth. This would involve understanding the business
and financial implications of various scenarios that might
play out in the market (as discussed in this paper). In
addition, the Office needs to determine leading indicators
for each scenario, and review specific implications on the
company. Finally, the Office should also determine for
each scenario specific strategic options, a set of actionable
initiatives to be carried out, and an operational plan.
2.	 As part of the second role, the Office needs to continuously
scan the market, review the overall situation, and track
leading indicators to understand the scenario that is likely
to play out. The response of the company would need to be
adjusted accordingly.
3.	 In the third role, the Office would work with business and
functional (including HR, IT, etc.) leaders to roll out and
manage specific initiatives (based on aligned strategic
options and operational plan as part of the first role) to
deal with the crisis, minimise impact on customers and
key stakeholders, and ensure business continuity and
growth.
A detailed cadence should also be set up for such an Office.
Typically, it should have a weekly review with the CEO/
Management Committee to take key decisions, track progress,
and solve any issues/escalations. Additionally, the Office
should also have once-a-week meetings with the business and
functional leaders to identify problems and develop suitable
solutions.
To conclude, the GRowTH Office would help manage the crisis,
find suitable solutions to emerging issues, and ensure the
company is ready to capitalise on the pent-up demand once
the pandemic subsides.
19
Navigating the COVID-19 crisis: Ensuring business sustainability and growth in an uncertain environment
End Notes
1
	https://www.business-standard.com/article/economy-policy/covid-19-world-faces-worst-crisis-since-great-depression-says-
imf-chief-120041000203_1.html
2
	https://www.euronews.com/2020/04/02/coronavirus-in-europe-spain-s-death-toll-hits-10-000-after-record-950-new-deaths-
in-24-hou
3
	 Rystad energy estimates
4
	 https://timesofindia.indiatimes.com/business/india-business/indias-fuel-demand-heads-towards-a-historic-slump-in-april/
articleshow/75208279.cms
5
	https://economictimes.indiatimes.com/industry/energy/power/indias-power-demand-falls-over-25-pc-to-125-81-gw-on-april-2/
articleshow/74965504.cms?from=mdr
6
	https://economictimes.indiatimes.com/industry/services/property-/-cstruction/covid-19-construction-halt-may-hurt-
companies/articleshow/74836731.cms?from=mdr
7
	https://www.business-standard.com/article/companies/steel-demand-to-contract-7-7-in-2020-production-down-by-30-50-
isa-120041900396_1.html
8
	https://www.business-standard.com/article/companies/covid-19-s-impact-on-demand-supply-to-undermine-cement-
manufacturers-120040700411_1.html
9
	https://www.business-standard.com/article/indian-railways/railways-plan-to-stop-operations-till-may-3-set-to-dent-irctc-
earnings-120041401734_1.html
10
	https://www.newindianexpress.com/business/2020/mar/27/sc-extends-time-for-sale-of-unsold-bs-iv-vehicles-barring-in-delhi-
ncr-amid-covid-19-lockdown-2122313.html
20
Navigating the COVID-19 crisis: Ensuring business sustainability and growth in an uncertain environment
Contact Us
Acknowledgements
Ashwin Jacob
Partner, Consulting
Deloitte Touche Tohmatsu India LLP
E-mail: ashwinjacob@deloitte.com
Prashanth Nutula
Director, Consulting
Deloitte Touche Tohmatsu India LLP
E-mail: pnutula@deloitte.com
Ayush Kanwar
Manager, Consulting
Deloitte Touche Tohmatsu India LLP
E-mail: akanwar@deloitte.com
Nikhil Nayak
Consultant, Consulting
Deloitte Touche Tohmatsu India LLP
E-mail: niknayak@deloitte.com
Harsh Kapoor
Partner, Consulting
Deloitte Touche Tohmatsu India LLP
E-mail: harshkapoor@deloitte.com
Avinash Nayak
Associate Director, Consulting
Deloitte Touche Tohmatsu India LLP
E-mail: avnayak@deloitte.com
21
Navigating the COVID-19 crisis: Ensuring business sustainability and growth in an uncertain environment
Deloitte refers to one or more of Deloitte Touche Tohmatsu Limited, a UK private company
limited by guarantee (“DTTL”), its network of member firms, and their related entities. DTTL and
each of its member firms are legally separate and independent entities. DTTL (also referred to as
“Deloitte Global”) does not provide services to clients. Please see www.deloitte.com/about for a
more detailed description of DTTL and its member firms.
This material is prepared by Deloitte Touche Tohmatsu India LLP (DTTILLP). This material
(including any information contained in it) is intended to provide general information on a
particular subject(s) and is not an exhaustive treatment of such subject(s) or a substitute to
obtaining professional services or advice. This material may contain information sourced from
publicly available information or other third party sources. DTTILLP does not independently
verify any such sources and is not responsible for any loss whatsoever caused due to reliance
placed on information sourced from such sources. None of DTTILLP, Deloitte Touche Tohmatsu
Limited, its member firms, or their related entities (collectively, the “Deloitte Network”) is, by
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Navigating the COVID-19 crisis | Ensuring business sustainability

  • 1. Navigating the COVID-19 crisis: Ensuring business sustainability and growth in an uncertain environment Lubricants sector May 2020
  • 2. 02 Navigating the COVID-19 crisis: Ensuring business sustainability and growth in an uncertain environment Contents Plausible scenarios 03 The situation and the challenge 03 The unknowns 04 Why scenarios 05 Scenario framework for the COVID-19 situation 06 Possible consequences on India's overall outlook 09 Impact on the lubricants ecosystem 11 Impact of COVID-19 on the Indian lubricants ecosystem 11 Implications for the Indian lubricants ecosystem 13 What should companies do to manage the crisis? 17 End notes 19 Contact us 20 Acknowledgements20 02 Navigating the COVID-19 crisis: Ensuring business sustainability and growth in an uncertain environment
  • 3. 03 Navigating the COVID-19 crisis: Ensuring business sustainability and growth in an uncertain environment The situation and the challenge The COVID-19 pandemic has pushed humanity and the global economy into a crisis not seen since ‘The Great Depression’.1 Due to the high infection rate and impact on public health systems, governments have enforced nationwide lockdowns, thereby significantly impacting agricultural harvesting and production, manufacturing supply chains, trade, services, and how people work and enjoy. This development is disrupting value chains, communication, and co-operation amongst business ecosystems, significantly affecting livelihoods. Moreover, it is difficult to estimate when these lockdown/staying at home norms (applicable to ~50 percent of the world’s population)2 would be relaxed completely, resulting in even more uncertainty about the future of many of these affected businesses. In these uncertain times, companies seek clarity on what could constitute a robust strategy to deal with short- to mid- term implications (6–24 months) stemming from COVID-19. Companies are facing challenges due to the following: Increasing volatility of business environments Excess information, untrustworthiness of sources, and ambiguous interpretations of information leading to possibly wrong assumptions Interconnectedness and unpredictability of influencing factors Unpredictable government interventions shaped by different interest groups Presence of increasingly global demand and supply chains Plausible scenarios
  • 4. 04 Navigating the COVID-19 crisis: Ensuring business sustainability and growth in an uncertain environment The unknowns The first step towards identifying the short- and mid-term outcomes of COVID-19 for business environments and building out strategies to prepare for them is to identify the unknowns that have the potential to influence these outcomes. The unknowns may revolve around changes in the family unit/society, such as values, ethics, and ways of working (e.g., need for social distancing, role of altruism). They could also be around economic impact of the pandemic on the society at large (e.g., loss of jobs, pay cuts, realignment of expenses), efficacy of healthcare response (e.g., healthcare policy and hospital response) and structure and integrity of processes and systems within companies (e.g., ability to digitise work processes, while ensuring data security, supply chain ability). There may also be uncertainty in the way governments respond and take actions to manage the crisis and how the corporate landscape shapes up, including permanent shifts in customer demand, flexible employment models, employee’s social security, etc. Additionally, uncertainty also exists in the manner in which people react to the crisis, including development of support systems, perspectives on what is safe and not safe, changing immediate and long-term priorities, etc. Figure 1 illustrates the unknowns across key dimensions that are applicable for most industries in India, and are likely to play a crucial role in shaping the picture of next 6–24 months. Out of these, the following are the four ‘biggest’ unknowns: How good will policy makers/ local government machineries be at keeping the ‘lights-on’ and responding in a lean and agile manner to a changing environment? How long will the pandemic last? Will a vaccine/robust treatment protocol become available? For how long will controls on free movement of people and goods last? How pervasive will the knock-on effects be? Family/society related Corporate/MSME related Healthcare policy/Government/economy related Governance Financial structure/markets Cohesion of the society Everybody for themselves Reemergence of the tribe Resilience of supply chains and related ecosystems Systemic breakdown Painful but resilient Cooperation amongst state and central governments Mistrust Cooperation Mobility of people and goods Sustained isolation Temporary interruption Enforcement of COVID-19 business regulations With force With measure Efficacy of healthcare response Uncontrolled spread Sustained containment Information transparency Complete confusion Regular data dissemination Nature and speed of government intervention Reactive; limited Proactive; significant Efficacy of company digitalisation Incremental initiatives Radical rethink Global corporate investment appetite Cautious Now more than ever Supply of workforce Shortage Abundance Family and social security Major impact Limited impact Rebound of consumption Not perceivable Immediate Global trade flows Shattered forever Back to normalcy Financial market volatility Financial crisis Stabilisation Figure 1. Key unknowns in the future of COVID-19 business environments Source: Monitor Deloitte analysis Debt in the system Long-term increase Back to normalcy Liquidity in the system Major concern Limited impact
  • 5. 05 Navigating the COVID-19 crisis: Ensuring business sustainability and growth in an uncertain environment Why scenarios Decision makers face formidable challenges, as taking the long view has never been harder. They have to make the best possible judgement calls every day while the world continues to be uncertain, volatile, and ambiguous. One way is to develop robust and strategically relevant scenarios that respond to, and take advantage of the many plausible outcomes for the future. While predicting the future is impossible, anticipating plausible scenarios in these circumstances is even more robust than predicting traditional forecasts for the most optimal future—preparing for a reasonable ‘worst-case’ scenario rather than a simple extrapolation exercise. In contrast to forecasting, scenarios examine what is most uncertain and surprising, as a mechanism to generate insight and provoke action regarding future- focused risks and opportunities. Scenarios are a tool to uncover blind spots and broaden perspectives about alternative future environments in which today’s decisions might play out.
  • 6. 06 Navigating the COVID-19 crisis: Ensuring business sustainability and growth in an uncertain environment Scenario framework for the COVID-19 situation Monitor Deloitte’s proprietary scenario planning process begins with defining the focal question that captures the core issue to be explored through the scenarios. In the current circumstances, we identify the focal question to be—‘How will the future of COVID-19 affected business environments shape up in India? What will be the impact on the lubricants sector?’ Having identified the major unknowns that may impact the future business environments, we proceed to identify the two most critical uncertainties—the unknowns that are most relevant and have the most potential to define future scenarios. Based on our analysis and findings, the ‘Extent and Speed of Government Economic Policy Support, Stimuli and Execution’ and the ‘Efficacy of Healthcare Response’ are the most critical uncertainties in the present situation (Figure 2). ‘Extent and Speed of Government Economic Policy Support, Stimuli and Execution’ measures the economic response level from the government and related bodies (including Reserve Bank of India, Ministry of Commerce and Industry, NITI Aayog, Securities and Exchange Board of India, etc.). It would cover Figure 2. Critical uncertainties and their endpoints Uncontrolled spread • Slow progress in rolling-out a robust testing protocol across the identified ‘hotspots’ • Inability of the administration to elicit support from populace towards adherence of self-quarantine and social distancing norms • Inability to manage regular and timely dissemination and implementation of treatment protocols • Inability to build/mobilise the required hospital infrastructure and capacity to triage, isolate, and treat those affected Reactive and limited • Lack of decisive measures to stabilise the economy with a significant infusion of liquidity into the banking system • Inefficient transmission of financial aid to small businesses, MSMEs, and daily-wage workers dependent on regular cash flow • Inefficient management of efforts to drive consumption and jumpstart sectors within the economy, which were most affected by this pandemic • Inability to translate policy into easily implementable measures to ensure smooth movement of goods and services Sustained containment • Speedy, targeted, and scaled roll-out of a robust testing protocol across the identified ‘hotspots’ • Effective combination of ‘carrot and stick’ approach to ensure wide-spread support from populace towards adherence of self- quarantine and social distancing norms to ‘flatten the curve’ and prevent any recurrence of the infection • Timely adoption of treatment protocols and centrally coordinated, scaled and consistent dissemination across the healthcare network • Availability of adequate hospital infrastructure and capacity within key hotspots to triage, isolate, and treat those affected across multiple infection waves Proactive and significant • Measured and timely intervention by the central bank to infuse adequate liquidity to drive consumption • Government-funded downturn compensation for MSMEs and daily-wage workers • Reforms to drive consumption, capture any emerging export opportunities, provide fiscal breaks or incentives; short-term working capital support to keep industries afloat • Coordinated interventions to smoothen policy implementation to enable movement of goods and services Source: Monitor Deloitte analysis Efficacy of healthcare response Extent and speed of government economic policy support, stimuli, and execution
  • 7. 07 Navigating the COVID-19 crisis: Ensuring business sustainability and growth in an uncertain environment Time Time Economicgrowth Economicgrowth Long-term disruption; severe, permanent loss Medium-term disruption; significant, recurrent loss Scenario 3: The L-Curve Scenario 4: The W-Curve Scenario 2: The U-Curve Medium-term disruption; significant, contained loss Economicgrowth Time Time Economicgrowth Short-term disruption; moderate, contained loss Scenario 1: The V-Curve Short term Comparison with Deloitte Scenarios Source: Monitor Deloitte analysis Medium term Long term fiscal stimulus, supporting impacted industries, keeping job losses to a minimum, providing credit to Micro, Small and Medium Enterprises (MSMEs), injecting liquidity to drive consumption, etc., and ensuring effective, efficient, and timely execution. ‘Efficacy of Healthcare Response’ measures the extent to which pandemic spread can be controlled through healthcare measures, including robust testing and treatment protocols, social distancing, lockdowns, and availability of adequate hospital infrastructure. It includes initiatives taken by Indian Council of Medical Research (ICMR), hospitals, and related bodies. While the former set of interventions is more likely to create a ‘push’ in the economy, the latter set of interventions would help create a ‘pull’ from the consumer’s end. The uncertainties, along with their two extreme end points when superimposed, give rise to four plausible scenarios of the future. These scenarios can be mapped directly to Deloitte’s proprietary COVID-19 scenarios being short-, medium-, and long-term disruptions and are described in Figure 3. Uncontrolled Spread Sustained containment Figure 3. The four plausible scenarios of the future Efficacyofhealthcareresponse Proactive and significant Reactive and limited Extent and speed of govt. economic policy support, stimuli, and execution
  • 8. 08 Navigating the COVID-19 crisis: Ensuring business sustainability and growth in an uncertain environment Scenario - 2 The U-Curve (Medium-term disruption) The virus’ spread is contained but not supported by adequate/timely economic stimulus to support failing businesses. Structural damage to the economy impacts the fundamental dynamics of many industries, and the consumer confidence gets affected resulting in long-lasting effects followed by slow and muted recovery. Scenario - 3 The L-Curve (Long-term disruption) The virus continues to spread and cause disruption globally and in India. Improper healthcare response coupled with inadequate economic stimuli leads to major structural damage to the economy and long- term recession; there is permanent loss of output as firms go bankrupt and employment, production levels, and consumer confidence take a long time to revive. Scenario - 4 The W-Curve (Medium-term disruption) The virus continues to spread, but strong policy response keeps the economic growth afloat; recurrences of the pandemic are seen, but businesses adapt through mini-recoveries, coupled with rising consumer confidence, head towards a slow, near-complete recovery. Scenario - 1 The V-Curve (Short-term disruption) Successful containment of the virus, supported by strong policy response prevents permanent structural damage; returning consumer confidence coupled with an agile response by businesses after removal of restrictions results in sharp recovery.
  • 9. 09 Navigating the COVID-19 crisis: Ensuring business sustainability and growth in an uncertain environment Possible consequences on India's overall outlook Out of the four scenarios, we believe that either of Scenarios 2 or 4 are the more likely manifestations in the Indian context. In other words, participation of the government through policy support, adequate stimuli, and robust execution to support the economy in a comprehensive manner may step-up, as the contagion continues to spread and affect larger sections of the society without any signs of relenting. This section narrates the ‘scenario stories’ that are likely to pan out. The U-Curve: The pandemic continues to spread globally for a prolonged period. It infects ~0.5 million of India’s population by the end of 1.5 years, but with a low infection fatality rate. The restrictions on movement remain stringent until the end of 2020, with varying degrees of relaxation introduced for different businesses, and strict directives to maintain hygiene and social distancing norms. The impact of the pandemic remains for over two years, with a slow, tenuous recovery beginning only in FY2022, and remaining modest for the next four quarters. Across the globe, the recovery is unsynchronised with the Asian economies recovering faster. Global supply chain disruptions cause stress on several industries that depend on imported raw materials, with some disruptions lasting for over six quarters before seeing any signs of recovery. The most impacted industries are likely to see prolonged liquidity crunch, restricted working capital, and reduction in production capacity due to withdrawal by investors and pressure from debtors. This may result in delayed supplier payments and several businesses filing bankruptcy, necessitating intervention by the government in the form of additional stimulus. On the demand side, high unemployment, increased household debt, and lengthier lockdowns continue to impact consumer demand for goods and services, with most consumers putting off big-ticket purchases, such as automobiles, home purchases and renovations for the long term and significantly changing entertainment/leisure preferences. Even after the pandemic dissipates, consumers continue to be wary of major expenses and instead opt to increase their savings. Pent-up demand is likely to break through eventually, reviving well towards the end of FY2022. The impact on financial health of businesses is likely to be significant, MSMEs default in large numbers, and big firms delay debt payments leading to an extreme financial crisis. As a result, capital markets shed off over a decade’s worth of gains, and liquidity dries up in short-term money market. Several small banks come under significant stress as the money market goes dry and margins fall. In such a scenario, few choose to consolidate with larger banks. The reduction in policy rates to maintain liquidity leads to inflationary pressures coinciding with rising pent-up demand. Overall, the country sees sub three percent growth for at least the next six to eight quarters, after which it slowly heads towards recovery. The W-Curve: In India, the virus infects ~0.75 million people over the next 1.5 years, but with lesser infection fatality rates than the global average. Movement restrictions continue to remain stringent, with major ‘hotspots’ locked down for over two quarters with varying degrees of restrictions. Businesses gradually resume operations in a phased manner, with continued emphasis on ensuring high standards of hygiene at workplaces. The impact of the ongoing slowdown is felt for the next three to four quarters, with recovery observed during the second half of FY2022. A higher likelihood of multiple subsequent outbreaks exists with the discovery of vaccine-resistant viral strains, but these are met by much better preparation and contingency plans by all the stakeholders—the government, the businesses as well as the populace. Full-fledged and synchronised recovery is seen from Q3 FY2022, as governments across the world enforce decisive policies to effectively ‘flatten the curve’ and minimise the impact on the economy. Supply chain disruptions cause stress on several industries that are dependent on Chinese imports, as they strive to look at alternate supply sources. This creates an opportunity for Indian manufacturers, who look to build capabilities to indigenise production, reduce import dependence, and present the world with an alternative source for products. However, for this to materialise, industries
  • 10. 10 Navigating the COVID-19 crisis: Ensuring business sustainability and growth in an uncertain environment and the government must collaborate to set up the required infrastructure. Several industries endure severe slowdown and liquidity crunch for ~ three to four quarters. However, the government that plays a proactive role in ensuring smooth running of the economy, bails out/supports these industries through timely macro- and micro-interventions. On the demand side, high unemployment, piling household debt, and lengthy lockdowns impact consumer spending until the end of 2020. There is a lag of three to four months observed in demand recovery post the removal of restrictions as people still fear falling sick. As a result, spending picks up in early FY2022, largely driven by pent-up demand, and recovers to near-2019 levels by mid-FY2022. Financially, poor credit demand and collections results in worsening of Indian banks’ balance sheet, with Non- Performing Assets (NPAs) jumping up to double digits. However, stress on the economy starts reducing after policy impact on demand and the positive impact of financial stimulus to manufacturing industries is felt from FY2022. As a result, the first wave of economic recovery begins in three to four quarters, potentially followed by a longer, but less painful period of recurrent bouts of slowdown.
  • 11. 11 Navigating the COVID-19 crisis: Ensuring business sustainability and growth in an uncertain environment Impact of COVID-19 on the Indian lubricants ecosystem Let us now discuss the likely implications of the COVID-19 pandemic on the Indian lubricants ecosystem (including raw material suppliers, lubricant players, contract/toll manufacturers, channel partners, and customers). A significant slowdown in transportation and the movement of people has been seen due to the lockdown. Transportation of goods has been severely curtailed as distribution chains have almost come to a halt. Overall traffic for goods and people (both work and recreation) in India has seen about ~55–60 percent reduction on average from the baseline.3 Fuel demand in India fell by 60 percent for the first fortnight of April.4 It is further possible that in both the W- and U- Curve scenarios, traffic is likely to see a significant reduction over the next four to eight quarters (depending on the scenario). Given the reduction in movement of commercial vehicles, the lube change intervals are expected to increase during this period. For passenger vehicles, the impact on lube change intervals is likely to be even more severe, with journey cycles changing drastically due to Work From Home (WFH) measures. This situation is likely to be exacerbated further due to existing issues in the auto sector (even prior to the pandemic and the lockdown). The allied auto sector has already been under considerable stress over the past 12–18 months due to both cyclical and structural changes. Apart from the cyclical changes, the structural changes have had a major negative impact on the sector—demonetisation, Goods and Services Tax (GST), liquidity crunch, shift to shared mobility, Axle load reform, BS-IV to BS-VI, etc. In addition, industrial activity in the lockdown period has shrunk. This has the potential to impact sales of various types of industrial lubricants, including transmission and hydraulic oils, metal working fluid, industrial gear oils, turbine oils, compressor oils, greases, agri-spray oils, other industrial lubes, etc. These lubricants are used across various industries, such as power, construction, metals and mining, iron and steel, chemicals, cement, railways, oil and gas, general manufacturing, etc. Considering that most of these industries have been impacted due to the lockdown, it is expected that the demand for industrial lubricants will also get impacted going forward. Figure 4 highlights the impact on a few of these industries. Figure 4. Impact on key industries Source: News articles, Monitor Deloitte analysis Construction Power Iron and steel Cement Railways Impact on the lubricants ecosystem ~25% fall in peak demand5 Complete lockdown6 10–20% demand contraction in FY20218 Complete shutdown of passenger traffic9 ~8% fall expected in 20207
  • 12. 12 Navigating the COVID-19 crisis: Ensuring business sustainability and growth in an uncertain environment As a result, stakeholders across the lubricants ecosystem are facing a prolonged slowdown. Base oil and additive suppliers have seen demand destruction across nearly all lubricant sectors, which is expected to put pressure on margins. The drastic fall in crude oil prices would only have a limited impact, since the key reason for fall in prices is lower demand across the value chain and further, lubricants are typically not in complete sync with crude oil prices. Hence, until demand recovers, lubricant players are likely to face headwinds in spite of lower crude prices. Packaging material suppliers have also faced issues due to their inability to deliver inputs during the lockdown. Although refineries and additive manufacturing plants have reduced their throughputs due to a fall in demand, the lockdown does not drastically affect their ability to continue running. However, major ports are facing issues due to congestion caused by stakeholders halting operations for the duration of the lockdown. Similarly, transporters responsible for moving goods are facing issues. Labour at many ports as well as loaders at logistics hubs and raw material plants consist of a significant number of migrant workers who have returned to their hometowns, affecting operations. This can lead to raw material shortages at the plants. Lubricant manufacturers (including toll manufacturers) are facing problems with operations. Apart from the inventory of inputs needed to keep plants running during the lockdown, manufacturing and movement of stock is highly dependent on contract labourers who are currently unavailable. Going forward, especially toll/contract manufacturers are likely to face working capital issues due to a reduction in the movement of stock. Such manufacturers will likely be the first to stop production, as they have to continue to pay some of the factor costs. This is expected to hamper operations in the mid-term. Channel partners are facing a drastic reduction in demand due to the lockdown. This has led to increased inventory levels with all channel partners and an inability to clear stocks. In addition, most of these partners are also de facto financiers for the commercial and industrial lubricants market, providing credit to keep the wheels moving. The destruction in demand is likely to result in both, defaults and inability to roll credit. Bazaar channel partners (~65 percent of the auto-lubricants market and ~25 percent to 30 percent of the overall market) are the most affected, and are likely to have severe working capital issues. Industrial lubricant distributors have been significantly impacted due to reduction in demand because of curtailment of industrial activity, increased defaults due to closure of MSME units, and increased credit requirements. Independent workshops (~15 percent of the auto-lubricants market) are facing similar issues on the demand front. Auto Original Equipment Manufacturers (OEMs) (~20 percent of the auto-lubricants market) are under considerable stress, with the industry almost at a standstill due to the lockdown. Auto dealers have seen severe impact due to their inability to deliver vehicles during this period. Most of the dealers have 30–45 days of finished goods inventory. Further, dealers risk having to take on significant burden on their balance sheets to liquidate unsold BS-IV inventory, estimated to be worth ~INR 6,300 crore.10 This has negatively affected the demand for lubricant factory fills. However, with the introduction of BS-VI, OEM first fills and franchise workshops will need to stock up on BS-VI ready lubricants, increasing lubricant demand in the short term. The prolonged lockdown has also put tremendous strain on the operations of other ecosystem players (mobility solution providers, used-car players, and after-market service providers) whose funding depends heavily on aggressive revenue growth projections. Shared mobility players (ride sharing, car sharing, ride hailing) may have to rethink their offerings, as customers may likely end up preferring private transportation modes that guarantee ‘social distancing’, at least in the short term. This may have a positive effect on lubricants demand in the future, due to the related rise in personal vehicle sales.
  • 13. 13 Navigating the COVID-19 crisis: Ensuring business sustainability and growth in an uncertain environment Implications for the Indian lubricants ecosystem As discussed, considering the magnitude and scale of the COVID-19 pandemic, stakeholders across the lubricants ecosystem need to prepare, plan, and follow a structured approach to manage the crisis. While they may respond by taking some actions immediately, they must also prepare in advance to launch initiatives just after the lockdown ends to recover and capture maximum value and any pent-up demand. In addition to these short- to mid-term actions, players also need to respond to permanent disruptions that this pandemic may have brought about (e.g., consumer behaviour) and changed the very way businesses operate today, and ensure that their businesses thrive with long-term interventions. We discuss some areas (Figure 5) around which players need to act so that they are ‘battle-ready’ for their quest to revive the industry and their respective businesses, once the pandemic subsides. Respond Considering the fact that India is already four to five weeks into the pandemic, it is expected that most companies would have already taken certain immediate steps to deal with the crisis. Given the uncertainty around the pandemic and disruptions to traditional supplier and distributor chains, companies need to communicate effectively and in a consistent manner, solve any incidents and operational risks expeditiously, manage the way forward, and develop a contingency plan. In addition, ensuring employee safety and well-being (via continuous communication, tele-counselling, remote working, health insurance, etc.) and changing ways of working to engage with channel partners (including ensuring adequate stock, financing support, new sales) are other key imperatives. Figure 5. Three-point action plan for companies Respond Immediate (during the lockdown) Recover Mid-term Thrive Long-term
  • 14. 14 Navigating the COVID-19 crisis: Ensuring business sustainability and growth in an uncertain environment Recover Post the initial response and as the lockdown gets lifted gradually, companies need to develop a comprehensive strategy to return to the market and kick start the demand engine. Such an effort should focus on the key geographies, products, customers, channels, supply chain, and other go-to- market elements (as highlighted in Figure 6). Identifying initial geographies to start sales: Given the varying severity of the pandemic across different regions and the possibility of a staggered opening of the lockdown (potentially starting with tier-2 and 3 cities, followed by major metros and industrial centres) as done in China, companies need to identify markets that are likely to open up first and develop plans to service them (including filling up the pipeline inventory, ability to retain or expand counter share, strengthen the ability of channel to generate/ service institutional demand, and any other enablers needed). Ensuring product alignment with market needs: COVID-19 is expected to have a varying impact on the Commercial Vehicles (CVs), Passenger Vehicles (PVs), and two-wheeler segments, in terms of existing vehicle usage and future sales. In such a scenario, it is critical to identify which product segment is expected to recover the fastest and focus manufacturing and distribution in those areas. Figure 6. Key elements of the ‘Recover’ phase for companies Respond Recover Thrive Identifying initial geographies to start sales Selection of geographies based on staggered lockdown removal across the country Maintaining channel health Credit facilities to distributors/wholesalers to help manage WC issues Ensuring efficient allocation of marketing spends Adoption of zero-based budgeting approach Maintaining the supply chain Alternate sources to meet demand Developing detailed go- to-market plans for post lockdown Collaborations, schemes, incentives Ensuring product alignment with market needs Lubricant manufacturing and distribution, based on recovery and needs of each sector Identifying new channel partners Replace existing partners that may have gone out of business during the crisis, disintermediation Source: Monitor Deloitte analysis Additionally, companies would also need to focus product development on BS VI (based on government regulations) and industrial lubes (based on any changes in consumer need and demand). Companies should focus on high margin products with continued demand in industrial lubes, such as food grade lubricants. Finally, it is possible that companies do not have the adequate raw materials to manufacture all types of lubes (e.g., imported inputs might be short). In such a situation, it is important to evaluate which other grades can be made/tweaked to meet customer demand in an effective manner. Identifying new channel partners: Given the financial strain the crisis has put on the channel, a strong possibility that small counters/ distributors may not be able to survive the crisis exists. Hence, companies need to proactively identify opportunities to rationalise the channel and identify new distributors or increase market coverage from existing large and well-funded distributors. Companies may also evaluate a different distribution model with greater disintermediation or direct to consumer interventions. Maintaining channel health: Given the fact that there is inventory build-up and delay in revolving customer credit in the channel due to reduced sales, distributors are likely to
  • 15. 15 Navigating the COVID-19 crisis: Ensuring business sustainability and growth in an uncertain environment face severe working capital issues. Companies may need to respond to this challenge by reviewing the channel partners’ role and the associated economics, including extending credit to small-scale customers, distributors, and partners with appropriate checks and balances. Some examples could include releasing any pending incentive payments, providing credit facilities in partnership with Non-Banking Financial Companies (NBFCs), faster reconciliations, and reducing the need for deposits, etc. Ensuring efficient allocation of marketing spends: Most companies have experienced a deep cut in their budgets because of the pandemic and the slowdown. As a result, companies should consider adopting a zero-based budgeting approach to identify clearly which promotions and schemes generate the maximum return and utilise the limited budget in those areas. Key to this would also be to re-look at the Above the Line (ATL)-Below the Line (BTL) mix using analytical models and then judiciously directing spends in those micro-markets and counters, which are likely to give maximum benefit keeping in mind competition strengths. Maintaining the supply chain: Another key implication of a staggered rollout is the possible delay in opening of lubricant blending facilities/raw material suppliers located in industrial areas, which may still be under lockdown. In such a situation, companies may need to look at alternate toll manufacturers and raw material sources proactively, so that sufficient stocks are in place to deal with pent-up demand. This may also have an implication on the products that could be manufactured (keeping in mind intellectual property restrictions related to product formulations). Companies would also need to relook at the distribution network and related linkages in the short/medium term to factor in need to maintain high service levels during the staggered roll-out period. Developing detailed go-to-market plans for post lockdown: Companies need to be ready to capture the demand when the market opens. This would involve creating detailed plans on all the above areas for each micro-market, realigning sales and supply chain efforts to the focus markets, launching various schemes in collaboration with the ecosystem, appropriately incentivising the sales team, and finding new ways of customer engagement (including service at home, loyalty programmes, digital apps, etc.). Thrive The themes and the illustrative responses mentioned are expected to help lubricant companies prepare for an expected U-shaped recovery. It is essential to note that this
  • 16. 16 Navigating the COVID-19 crisis: Ensuring business sustainability and growth in an uncertain environment expectation is built on the prevailing condition of the industry, an understanding of the pandemic’s likely spread, the time it takes for containment, and the impact of these events on the industry specifically. However, the behaviour of the virus in reality (development of more robust strains vs. development of robust treatment protocols and vaccine) and the time it takes to contain the spread (four quarters vs. more than six quarters) are factors that are difficult to predict with any amount of certainty. Hence, it is possible that the sector may head towards an even more prolonged W-shaped recovery instead, wherein a second bout of the pandemic follows the initial remission. Companies must look to identify the onset of such a scenario by tracking and observing certain leading indicators. This would help them to be well- prepared to respond to the second wave and minimise both financial losses and the ensuing structural damage to the value chain. Additionally, it is critical to review how the situation unfolded in countries that were ahead of India in the COVID-19 curve, such as China and South Korea. Some of the indicators to understand which scenario plays out are listed below: • Government support and economic stimulus packages (as percent of GDP) • Traffic data in key markets as a surrogate for fuel consumption • Change in infection rates and infection fatality rates • Change in number/status of infection ‘hotspots’ • Reinforcement/continuation of lockdown norms, especially in large cities, etc. • Reports of recurrent waves in other economies • Port cargo congestion handling data for key ports • Success rates of different treatment protocols for COVID-19 • Delay in the development of a vaccine/discovery of alternate robust strains of the virus • Frequent violation of social distancing norms in key markets While the initiatives discussed for the U-shaped recovery remain valid even in the W-shaped scenario, companies must prioritise tactics needed to secure their supply chains and develop trigger-based micro-work plans in partnership with the network to ensure adequate response as the situation evolves. Such a response would need to account for changing preferences of customers with regards to mobility, focus on the hyper-local model, shift from products to a products- and services-based model, adoption of an ecosystem/partnership based approach, increased focus on digital, and redesign of manufacturing and supply chain architecture.
  • 17. 17 Navigating the COVID-19 crisis: Ensuring business sustainability and growth in an uncertain environment What should companies do to manage the crisis? Companies need to draw up specific multi-disciplinary plans to help ‘recover’ from the crisis, and ensure business growth and sustainability as the pandemic subsides. As a starting point to this exercise, companies must set up a GRowTH office (Gain, Recover, Thrive). This would typically be an extension of the COVID Crisis Command Centre, that most companies would have set up in the immediate aftermath of the pandemic to ‘respond’ to any operational risks or issues, and ensure employee well-being. A GRowTH Office (Office) is made up of a three to four member cross-functional team, which reports directly to the CEO or Management Committee. The structure of such an office is highlighted in Figure 7. Supply chain • Availability of all inputs (incl. imported) to continue production? • Ensuring functional supply chain that minimizes stock outs? Manufacturing operations • Ensuring product mix is in line with changing market conditions? • Managing production in case plant location is a COVID hotspot (e.g., via toll manufacturers)? Marketing • Managing change in media consumption habits of customers? • Providing special promotions/ schemes to customers to capture pent-up demand? Technology Digital • Virtualization to enable traditional offline processes and systems to operate digitally? • Utilizing digital interventions across the value chain via start-ups to rapidly scale-up (incl. apps, cloud, video, etc.)? • Developing bespoke demand and price forecasting tools, operational control towers to manage decision making in micro markets? Talent • Ensuring employee well- being and any special benefits/ policies? • Maintaining high employee morale, while working in a crisis scenario? Sales • Gauging health of channel partners (incl. need for financing)? • Understanding need for additional distributors/ ecosystem partnerships? • Developing detailed GTM to kick start demand engine post lockdown? Meeting cadence • Weekly meetings with CEO/ Management Committee on key updates and any functional/ business issues • Weekly problem solving meetings with business/ functions Roles 1 Develop a plan for the CEO/ Management Committee to manage the COVID crisis and ensure business sustainability and growth 2 Evaluate changing situation and emerging scenarios, based on various leading indicators and update CEO/ Management Committee on the same 3 Work with business/ functional leadership to roll-out specific tactics in line with evolving business scenario Figure 7. Key focus areas for GRowTH Office Core team (3-4 membercross- functional teamreporting to senior management) Sensing and trackin g Source: Monitor Deloitte analysis
  • 18. 18 Navigating the COVID-19 crisis: Ensuring business sustainability and growth in an uncertain environment The Office has the following three key roles: 1. As part of the first role, the Office would prepare a detailed plan to manage the crisis and ensure business sustainability and growth. This would involve understanding the business and financial implications of various scenarios that might play out in the market (as discussed in this paper). In addition, the Office needs to determine leading indicators for each scenario, and review specific implications on the company. Finally, the Office should also determine for each scenario specific strategic options, a set of actionable initiatives to be carried out, and an operational plan. 2. As part of the second role, the Office needs to continuously scan the market, review the overall situation, and track leading indicators to understand the scenario that is likely to play out. The response of the company would need to be adjusted accordingly. 3. In the third role, the Office would work with business and functional (including HR, IT, etc.) leaders to roll out and manage specific initiatives (based on aligned strategic options and operational plan as part of the first role) to deal with the crisis, minimise impact on customers and key stakeholders, and ensure business continuity and growth. A detailed cadence should also be set up for such an Office. Typically, it should have a weekly review with the CEO/ Management Committee to take key decisions, track progress, and solve any issues/escalations. Additionally, the Office should also have once-a-week meetings with the business and functional leaders to identify problems and develop suitable solutions. To conclude, the GRowTH Office would help manage the crisis, find suitable solutions to emerging issues, and ensure the company is ready to capitalise on the pent-up demand once the pandemic subsides.
  • 19. 19 Navigating the COVID-19 crisis: Ensuring business sustainability and growth in an uncertain environment End Notes 1 https://www.business-standard.com/article/economy-policy/covid-19-world-faces-worst-crisis-since-great-depression-says- imf-chief-120041000203_1.html 2 https://www.euronews.com/2020/04/02/coronavirus-in-europe-spain-s-death-toll-hits-10-000-after-record-950-new-deaths- in-24-hou 3 Rystad energy estimates 4 https://timesofindia.indiatimes.com/business/india-business/indias-fuel-demand-heads-towards-a-historic-slump-in-april/ articleshow/75208279.cms 5 https://economictimes.indiatimes.com/industry/energy/power/indias-power-demand-falls-over-25-pc-to-125-81-gw-on-april-2/ articleshow/74965504.cms?from=mdr 6 https://economictimes.indiatimes.com/industry/services/property-/-cstruction/covid-19-construction-halt-may-hurt- companies/articleshow/74836731.cms?from=mdr 7 https://www.business-standard.com/article/companies/steel-demand-to-contract-7-7-in-2020-production-down-by-30-50- isa-120041900396_1.html 8 https://www.business-standard.com/article/companies/covid-19-s-impact-on-demand-supply-to-undermine-cement- manufacturers-120040700411_1.html 9 https://www.business-standard.com/article/indian-railways/railways-plan-to-stop-operations-till-may-3-set-to-dent-irctc- earnings-120041401734_1.html 10 https://www.newindianexpress.com/business/2020/mar/27/sc-extends-time-for-sale-of-unsold-bs-iv-vehicles-barring-in-delhi- ncr-amid-covid-19-lockdown-2122313.html
  • 20. 20 Navigating the COVID-19 crisis: Ensuring business sustainability and growth in an uncertain environment Contact Us Acknowledgements Ashwin Jacob Partner, Consulting Deloitte Touche Tohmatsu India LLP E-mail: ashwinjacob@deloitte.com Prashanth Nutula Director, Consulting Deloitte Touche Tohmatsu India LLP E-mail: pnutula@deloitte.com Ayush Kanwar Manager, Consulting Deloitte Touche Tohmatsu India LLP E-mail: akanwar@deloitte.com Nikhil Nayak Consultant, Consulting Deloitte Touche Tohmatsu India LLP E-mail: niknayak@deloitte.com Harsh Kapoor Partner, Consulting Deloitte Touche Tohmatsu India LLP E-mail: harshkapoor@deloitte.com Avinash Nayak Associate Director, Consulting Deloitte Touche Tohmatsu India LLP E-mail: avnayak@deloitte.com
  • 21. 21 Navigating the COVID-19 crisis: Ensuring business sustainability and growth in an uncertain environment Deloitte refers to one or more of Deloitte Touche Tohmatsu Limited, a UK private company limited by guarantee (“DTTL”), its network of member firms, and their related entities. DTTL and each of its member firms are legally separate and independent entities. DTTL (also referred to as “Deloitte Global”) does not provide services to clients. Please see www.deloitte.com/about for a more detailed description of DTTL and its member firms. This material is prepared by Deloitte Touche Tohmatsu India LLP (DTTILLP). This material (including any information contained in it) is intended to provide general information on a particular subject(s) and is not an exhaustive treatment of such subject(s) or a substitute to obtaining professional services or advice. This material may contain information sourced from publicly available information or other third party sources. DTTILLP does not independently verify any such sources and is not responsible for any loss whatsoever caused due to reliance placed on information sourced from such sources. None of DTTILLP, Deloitte Touche Tohmatsu Limited, its member firms, or their related entities (collectively, the “Deloitte Network”) is, by means of this material, rendering any kind of investment, legal or other professional advice or services. You should seek specific advice of the relevant professional(s) for these kind of services. This material or information is not intended to be relied upon as the sole basis for any decision which may affect you or your business. Before making any decision or taking any action that might affect your personal finances or business, you should consult a qualified professional adviser. No entity in the Deloitte Network shall be responsible for any loss whatsoever sustained by any person or entity by reason of access to, use of or reliance on, this material. By using this material or any information contained in it, the user accepts this entire notice and terms of use. ©2020 Deloitte Touche Tohmatsu India LLP. Member of Deloitte Touche Tohmatsu Limited