analysis of the impact of COVID 19 on the Indian stock market. Industries chosen to analyse are: FMCG, Pharmaceutical, and Banking.

1. IMPACT OF
COVID-19 ON
THE INDIAN
STOCK MARKET
NIDHI ZADE
AMITY BUSINESS SCHOOL, MUMBAI

2. THE COVID CRISIS
• The world health organization declared the spread of COVID-19 as a pandemic in
March 2020.
• As far as the economy, India hit the lowest GDP of 24 years (-23.9 % in June 2020)
• Financial markets in India are showing sharp volatility as a result of the fallout in
global markets. The drop is in line with the global benchmark indices as the domestic
market

3. SECTORS TO ANALYZE
FMCG PHARMACEUTICAL FINANCE

4. FAST MOVING
CONSUMER GOODS

5. DABUR INDIA LIMITED
• March 2020
• Price drop from 517.95 to 396.05
• Price: 517.15 as on 28 Oct 2020

6. DABUR INDIA LIMITED
• The company’s domestic FMCG business saw a decline of 6.9% due to
the lockdown in April in the first quarter of FY21. While domestic
volumes declined by 9.7%.
• healthcare segment contributes 37.6% to the company’s sales,
benefited with consumer pivot to local remedies and immunity
building products.
• Under the segment, the healthcare supplements business was up
52.6% led by growth in its Chyawanprash brand—that was up 700%
during the quarter.

7. HINDUSTAN UNILEVER
• March 2020
• Price drop from 2165.60 to 1800
• As on 28 Oct 2020, price: 2164.35

8. HINDUSTAN UNILEVER
• The company’s business in the June quarter was dented as India’s strict lockdown
implemented in March crushed out-of-home consumption and impacted sales of
discretionary beauty and personal care products. But, like other FMCGs, it benefitted
part of its foods and personal hygiene business.
• In the June quarter, the company had reported a 7% year-on-year decline in its
domestic business. As of 20th October Food and refreshment business saw nearly 83
per cent jump while home care and beauty and personal care segments were almost
near the pre-COVID levels.

9. SUMMARY
• lockdown in late March severely dented FMCG distribution and manufacturing. While
demand for health and hygiene products and packaged foods grew heavily, other
categories such as personal care and on-the-go foods and beverages suffered.
• Sporadic lockdowns in some areas in July may have hit the recovery rate in the current
(September) quarter
• April and May were reported as the worst for FMCG makers due to restrictions on
store openings and many households had stockpiled provisions in March in
anticipation of the lockdown.
• Consumers are still cautious about spending on non-necessities and demand for out-
of-home will remain under pressure in FY21.

10. PHARMACEUTICALS

11. SUN PHARMACEUTICALS
• March 2020
• Price drop from 405 to 320
• Price increased from 340 to 462 in April
• As on 28 Oct 2020, price: 463.40

12. SUN PHARMACEUTICALS
• September 23 – Stock price increases by 2% with the launch of ICUMYA
• The company is also leveraging IT technology tools to ensure business continuity and to
facilitate work-from-home for many employees.
• The company is evaluating the potential of some existing products which can be useful in
COVID19 treatment. Both products are currently undergoing phase-2 trials in India.
• They donated medicines useful in managing COVID-19 symptoms and hand sanitizers worth
about ₹250 million to support the Indian government's COVID-19 pandemic response.
• Sun Pharma has also arranged personal protective equipment kits, disinfectants and gloves to
help fight the pandemic.

13. DR REDDYS LABORATORIES
• March 2020
• Price drop from 3176.85 to 2619.50
• Price increased from 2619.50 to 4027 in
April, 2020
• as on 28 Oct 2020, price: 4951.00

14. DR REDDYS LABORATORIES
1 July 2020
announced partnership with Tokyo-based Fujifilm Corporation and Dubai-
based Global Response Aid for the development, manufacture and sales
of Avigan Tablets (favipiravir), a potential treatment of COVID-19.
9 Sep. 2020
launched Gilead Sciences Remdesivir, an investigational drug used in the
treatment of COVID-19, under the brand name Redyx in India.
25 Oct. 2020
Dr Reddy's to test Sputnik V on 100 volunteers in phase 2

15. SUMMARY
• India is the largest provider of generic drugs globally. Indian pharmaceutical sector is
expected to grow to US$ 100 billion by 2025.
• The impact on the Indian pharma sector is typically evident, given that most raw
materials are procured from China, the epicentre of the outbreak.
• Timelines for drug filings, testing and approvals have been delayed. Furthermore, cash
flows from new generic drug launches have either been wiped out or delayed
• General analysis shows that the pharmaceutical stocks maintain a general momentum
with the Benchmarking index Nifty. There is a general perception that during an
outbreak of some diseases, the demand for pharmaceutical stocks should increase,
which is partially evident in from the months APRIL – JUNE with the news of vaccines
and developments.

16. BANKING AND
FINANCE

17. HDFC BANK
• March 2020
• Price drop from 1181.80 to 767.60
• As on 28 Oct 2020, price: 1209.60

18. HDFC BANK
• Amidst the nationwide lockdown, 13800 ATMs across the country were operational
and that the bank had also taken to deploy mobile ATMs.
• Over 2 lakh customers were being reached out to everyday.
• Card spends after 23 March, fell by 35% as compared to the average of the first two
months of the year.
• Addressing the impact of the RBI provided relief, the bank said that customers opting
for the moratorium were in “single digit” numbers
On the SME front, the bank said that customers indicated they were likely to arrange
funds on their own for rehabilitation as availing the moratorium entailed a cost.

19. STATE BANK OF INDIA
• March 2020
• Price drop from
328.20 to 181.00
• As on 28 Oct 2020,
price: 190.45

20. STATE BANK OF INDIA
• State Bank of India had also decided to open a special credit facility for small
business borrowers impacted by the coronavirus outbreak, according to a
senior official at India’s largest lender.
• With a view to provide some degree of relief to the borrowers whose
operations are impacted by COVID 19, it was decided by the Bank to make
available additional credit facilities to the eligible existing borrowers by way of
ad-hoc facilities i.e. COVID 19 emergency credit line (CECL) to tide over the
current crisis.

21. SUMMARY
• The financial sector has been one of the most affected, with bank valuations dropping
in all countries around the world
• 70% of banking sector debt was affected by Covid-19 impact. Credit card sourcing
dropped 87%, while card spends declined 44%.
• COVID-19 will have long-lasting impact on many industries including banks. Post crisis,
digital maturity and COVID-19 resiliency will determine strategy of banking players
with three segments emerging: banks that are already future-ready with truly digital
banking capabilities and cost elasticity, banks that are digital laggards and that need to
evolve and renew due to sub-par COVID-19 resiliency, and lastly banks that will
struggle to survive as a result of being digital laggards with sub-par financial and
operational resiliency

22. CONCLUSION
• Financial markets in India are showing sharp volatility as a result of the fallout in
global markets.
• Since March, there was a steep drop in the stock prices, as we can see by the charts.
Markets can still be considered highly volatile, but revival signs are evident now that
the economy is slowly coming back to its state.
• Achieving pre-COVID levels is a huge hurdle every company from every sector must
cross.
• The COVID-19 lockdown showed every company’s emergency response, risk and loss
bearing capacities, and the ability to adjust, accommodate and get innovative to
bounce back as quickly as possible.