Impact on 3 sectors are given

1. IMPACT OF COVID
ON SELECTED
SECTORS OF
INDIAN STOCK
MARKET
-Arjun Nair

2. 1. Pharmaceuticals
 India is the top global distributor of generic drugs.
 More than 50 percent of the global market for different vaccines is provided by the
Indian pharmaceutical industry. Many raw materials for the production of drugs are
manufactured from China.
 The supply of raw materials from China may also have affected controls on people's
travel, lockdowns imposed in different locations, logistics difficulties, due to the
epidemic of coronavirus in China.
 The Committee has prepared two schemes authorised by the Cabinet for the promotion
of the domestic production of bulk medicines.
 Output Related Reward (PLI) and Bulk Drug Parks Marketing programme and programme.
Under the PLI Scheme, financial benefits are offered on the basis of purchases made by
the suppliers chosen for 41 goods representing all 53 APIs listed.
 It is anticipated that the new schemes will draw significant investment, increase
domestic production of KSMs, DIs and APIs and, to a large extent, reduce the country's
import dependency.

3. CIPLA
 The pharmaceutical firm is Cipla Limited.
 The Firm sells its drugs for the clinical fields, including cardiovascular, children's
health, dermatology & cosmetology, asthma, HIV / AIDS, infectious diseases & critical
care, malaria etc. Stock seems to be getting depleted from the upward run, creating a
triple tip.
 It is likely to trade or fall from there in a range-bound manner.
 Higher than Industry Sales Growth: Sales has increased at an annual rate of 8.71
percent over the last 5 years, relative to an industry average of 7.09 percent.
 Increasing market share: Market share has grown from 7.1 percent to 7.58 percent
over the past 5 years.
 Higher than Industry Net Profits: Net income has risen at an annual rate of 5.55
percent over the past 5 years, relative to a 3.27 percent industry average.
 Smaller than the Equity Debt to Industry Ratio: For the past 5 years, the debt-to -
equity ratio has been 30.2 percent, vs. the 45.97 percent industry average.
 Greater than the actual industry ratio: The current ratio has been 250.15 percent for
the past 5 years, relative to an industry average of 161.62 percent.

4. Dr Reddy’s Laboratories Ltd
 In India and abroad, Dr. Reddy's develops and markets a wide array of pharmaceuticals.
 The business has over 190 drugs, 60 prescription manufacturing active pharmaceutical
ingredients (APIs), diagnostic kits, critical care, and biotechnology products.
 Wide cap; stock is ranked 36 in the country on NSE as per M-cap with a market cap of ⁇ 82,130
cr.
 Lower than Industry Sales Growth: Sales has increased at an annual rate of 3.53 percent over the
last 5 years, relative to an industry average of 7.09 percent.
 Decreasing market share: Market share has declined from 9.44% to 7.89% over the past 5 years.
 Lower than Industry Net Income: Net income has risen at an annual rate of -2.81 percent over
the past 5 years, relative to an industry average of 3.27 percent.
 Smaller than the Equity Debt to Industry Ratio: The debt-to - equity ratio has been 29.73 percent
for the past 5 years, compared to an industry average of 45.97 percent.
 Higher than the actual industry ratio: The current ratio has been 163.23 percent for the past 5
years, relative to an industry average of 161.62 percent

5. Sun Pharmaceutical Industries Ltd.
 Sun Pharmaceutical Industries Limited, based in Mumbai, Maharashtra, is an Indian multinational
pharmaceutical company manufacturing and distributing pharmaceutical formulations and active
pharmaceutical ingredients (APIs) mainly in India and the United States.
 Big cap; stock is listed 25th in the country on NSE as per M-cap with a market cap of ⁇ 1,12,876 cr.
 Lower than growth in industry sales: higher than growth in industry revenue reflects an improved
opportunity for the company to boost its market share.
 Revenue has risen at an annual rate of 3.69 percent over the last five years, compared to an industry
average of 7.09 percent.
 Decreasing Market Share: Market share is the proportion of the overall revenue of an industry heading
to a single sector. This provides a general definition of the scale of a company v / s its rivals. Market
share has declined from 17.24% over the last 5 years.
 Lower than Net Profits of Industry: Net income equals less investments than net earnings (profit). This
figure is a major indicator of how profitable the corporation is. Net income has risen at an annual rate
of -3.67 percent over the past 5 years, relative to an sector average of 3.27 percent.

6. 2. Telecom
Tata Teleservices (Maharashtra) Ltd (TTML)
 Tata Teleservices Maharashtra and TTSL offer Virgin Telecom branded services to lure young Indians.
 Leased cables, DSL, Wi-Fi, Ethernet, Operated Gateway services & Video Conferencing services compose
the company's suite of wireless data network and application services.
 Sales of Tata Teleservices (Mahar Maharashtra) (TTML) shares decreased 17.94 percent to Rs 258.88 crore.
 In the past three days, it has zoomed by 72 percent from the Rs 2.82 stage on Friday.
 The Tata Group telecommunications services company's portfolio was trading at its 52-week peak.

7. Vodafone Idea Ltd
 One of India's leading operators of GSM telecom services is Idea Cellular, part of the
Aditya Birla group.
 This telecommunications firm has permits to work in all 22 fields of operation.
 The organisation also offers value-added services such as GPRS, call meeting, GSM, GPS
and also offers tailored solutions according to particular business needs.
 The company was also interested in LD 's market, Mobility.
 Vodafone Idea (VIL) expected to announce declines in mobile sales and operating
income in the April-June period.
 Many of their feature phone users were unable to recharge during the pandemic-
induced lockdowns.
 On the margins front, both of India 's older telecoms are expected to benefit, because
of lower sales & marketing prices.

8. Reliance Communications Ltd
 It is largely active in the Wireless, Broadband, Rural Connectivity, Reliance World, IDC, Business Carrier and
Infrastructure sectors.
 Wireless-Reliance Mobile -is the biggest mobile phone brand in India.
 Reliance Mobile World-Reliance Mobile's Reliance Mobile World suite is a special framework based on Java.
 Rural Connectivity- Dependency Communications is committed to bringing about a full rural telephony revolution.
 IDC- Reliance is India's largest Internet Data Center(IDC) service provider, hosting business critical applications of
Indian and foreign blue-chip companies, financial institutions and other important organisations.
 The firm reflected on the effect of Covid-19 on the business and the prospects ahead.
 At the upper price band of Rs3.59 per piece zooming by 4.97% on Sensex, the RCom stock performed.
 "In a regulatory filing, RCom said," We would like to advise you that although Reliance Communications Limited (the
"Corporate Debtor") is vulnerable to the effect of the pandemic (COVID-19), not only on human life, but on companies
and economic development throughout the world and in the country however, adding the company said, "its effect
will only be realized and ascertained over the next few months.
 RCom mentioned that it has been monitoring the situation closely and has taken proactive measures to comply with
various directions/regulations/guidelines issued by Government of India, various state governments and local bodies
to ensure the safety of workforce across all its offices.
 RCom stated that the telecommunication services, being essential was permitted to continue operation during the
period of lockdown, adding it said, "The Corporate Debtor has continued to provide services to its Enterprise
customers without any interruptions and honour commitments, despite facing all odds during lockdown."

9. 3. Automotive
Bosch
 It is the largest producer of auto parts in India.
 It is possible to identify the company's operations under the following Automobile
Technology divisions, i.e. Injection Systems for Diesel and Gasoline Petrol, Blaupunkt
Multimedia Systems for Automobile, Car Electrical and Accessories, Starts and Motors,
Electricity and Body Systems; Industrial Machinery, i.e. Packaging equipment, special
purpose equipment and luxury products and technologies for manufacturing, i.e. Protection
Devices, Power Equipment, etc.
 Bosch Ltd, the world's largest automotive component maker's Indian arm, has seen an order
book erosion of $800 million for BS VI projects as Covid-19 pandemic pulled the market into
deep end.
 The German auto component major, which had secured Rs 24000 crore of BS VI order book
position before Covid saw orders drop to Rs 18000 crore, the company informed the
analysts at a Q1 earnings call.
 On the back of 11% slip in business for FY-20, the auto component industry is bracing for
yet another year of steep decline as both domestic and export demand remains sluggish.
 In the Q4 call of FY-20, Bosch had said it does not expect the market to regain the previous
peak before FY-24.

10. Apollo Tyres LTD
 It is a high-performing company and the largest maker of Indian tyres.
 The company currently manufactures the full range of automobile tyres for ultra- and high-
speed passenger vehicles, trucks and buses, field, off-road, manufacturing and specialist
applications such as mining, rethreaded tyres and material rethreading.
 The company's product portfolio includes Passenger Car Tyres, Alloy Wheels, Sports Utility
Tyres, Van Tyres, Passenger Winter Tyres, Heavy Commercial Tyres, Medium Commercial
Tyres, Small Commercial Tyres, Circular Tyres for Agriculture, Cross-ply Tyres for
Agriculture, Off-The-Road Tyres & Speciality Vehicles Tyres.
 For the first quarter ended June 30, Apollo Tyres announced on Wednesday a consolidated
net loss of Rs 135 crore, hurt by lower revenues due to the coronavirus pandemic.
 In the last fiscal cycle from April to June, the tyre manufacturer posted a net profit of Rs
142 crore.
 Net sales declined to Rs 2,828 crore during the quarter under review, from Rs 4,272 crore
in the year-ago span, Apollo Tyres said in a statement.
 Although the first half of the first quarter was almost a total washout, after the markets
opened up, particularly in the replacement market, our performance was excellent.

11. MRF Tyres LTD
 It is an India-based company engaged in the production, distribution and sale of tyres for various types
of vehicles.
 The firm is principally engaged in the manufacture of rubber goods such as tyres, plugs, flaps, rubber
treads and conveyor belts.
 The firm has different commercial interests, such as pretreads, paint and coats, as well as toys.
 Passenger vehicle tyres, two wheelers, trucks and utilities, tubes and flaps are manufactured by the
firm.
 - On Friday, Tyre 's key MRF NSE 0.68 percent said it predicted that after the COVID-19 imposed
lockout on its activities, the financial results for the current quarter will be adversely affected.
 The tyre manufacturer said in a BSE filing on the effect of the pandemic on its company that it
expects demand to be lower than usual while the supply of contract labour may face 'certain
challenges.'
 Due to various conditions levied by the government for the management of COVID-19, such as time
limits, ceilings on personnel, the occurrence of any COVID-19 cases in the district or area, there may
also be difficulties faced with regard to the availability of raw materials.
 On the company financials, the company said it has a strong 'net worth', low levels of debt and
favourable liquidity position.