The document discusses the impact of Covid-19 on various sectors of the Indian economy including pharma, banking, and IT. It analyzes key companies within these sectors and finds that while some pharma companies like Sun Pharma were negatively impacted, others like Cipla and Alkem Labs grew profits during the pandemic. Banking was also not significantly impacted, with leading banks like HDFC, Kotak Mahindra, and SBI performing well or growing profits. Within IT, TCS saw declines but HCL and Infosys continued growing revenue and profits amid the pandemic. Overall the analysis found that pharma, banking and IT were sectors that were relatively resilient or grew during the crisis.

1. Impact of Covid-19 on various sectors of
the Economy
By
Divyanshu Kumar Singh
MBA (B&F)
Amity University, Mumbai

2. • COVID-19 is undoubtedly one of the biggest global events of our lifetimes,
presenting unprecedented challenges to many industries, governments and
people all over the world
• The pandemic remains a health and humanitarian crisis, and the business and
economic impact has been deep and far reaching.
• The impact of the COVID-19 pandemic and the lockdown is both tangible and
intangible. But there is still no clarity on the deeper impact that it will have on
India’s economic system.
• Increasing prices of goods and services at one hand and creeping income
activities at another hand is going to create another big problem for the countries
• Further in the next few slides I will do the analysis of three main sectors of the
economy amid pandemic i.e. Pharma Industry, Banking sector & IT Sector.

3. Pharma Sector
• The Indian pharmaceutical industry is very prominent and is rapidly growing its
presence in the global pharmaceuticals
• Today India is world’s third largest drug producer by volume and 13th by value and
the country’s market manufactures 60 percent of vaccines globally
• According to the Department of Pharmaceuticals (DoP), India is the source of
60,000 generic brands and home to 3,000 pharma companies with a strong
network of over 10,500 manufacturing facilities
• The DoP aims to make the country a hub for end-to-end drug discovery under its
‘Pharma Vision 2020’
• As indicated in a 2015 McKinsey report, the Indian pharmaceutical market will
grow from a market size of USD 12.6 billion in 2009 to USD 55 billion by 2020

4. • It was last valued at USD 40.2 billion by the National Investment Promotion and
Facilitation Agency(Invest India) in 2019.
• According to the Department of Pharmaceuticals, the size of Pharma industry is
around USD 43 Billion as of August 2020 with a growth rate of 7-8% in drug sector
and 15- 16% in medical devices sector
• the industry’s contribution to the Gross Domestic Product (GDP) is about 1.72%.
• India has consistently maintained a trade surplus since the year 2010-11. The
annual trade surplus for the year 2018-19 was about USD 13.10 bn
• During the period 2019-20 the Pharmaceutical exports from India grew 7.57% to
$20.58 billion which is lower than the growth rate of 2018-19 which was 10.72%
• Due to fall in export in the last quarter of 2019 because of corona impact on trade
as Exports in January 2020 increased 11.72%. But in February and March, growth
rates were 7.7% and minus 23.24% respectively, resulting in a negative growth of
2.97% in Q4.

5. Analysis of impact on companies in Pharma sector
Sun Pharma
• Sun pharma Net profit is continuously deteriorating every quarter and it has
become negative & reached -2419 crore in the 1st quarter of 2020 from 494
crores in the last quarter of 2019
• This huge fall in the net profit is due to the hefty increase in the total expenditure
which increased by around 14% has compared to the previous quarter
• Hence we can say that Covid 19 has a bad impact on the performance of Sun
Pharma though the overall performance of industry is good during the period
• Even before pandemic the company’s performance was continuously degrading
as it reported a net profit of 102 crores in the December quarter of 2019.
• It one of the few companies from pharma sector to show such huge degrowth
amid Covid-19

6. Alkem Lab
• Alkem lab had witnessed a fall in its PAT in the March 2020 which 50.9% fall on Q-
o-Q basis.
• In the June quarter it reported a net profit of 423 crores which a 126.2% increase
in Net profit on Y-o-Y basis and 121.46% increase on Q-o-Q basis
• It hit year low of Rs 1881.30 on 23rd March 2020, the day of announcement of
nationwide lockdown. But it hit year high of Rs 3089.55 on 7th Aug 2020
• Hence we can say looking at the financial performance of Alkem lab that it has
turned this pandemic into an opportunity and increased its profit significantly

7. Cipla
• As we can see in the above table that Cipla had witnessed a fall in its PAT to 242
crores in the March 2020 which is 31.44% fall from Dec 2019 quarter
• In the next (June) quarter it reported a net profit of 571 crores which a 135.9%
increase in Net profit on Q-o-Q basis
• It was 21.48% increase on Y-o-Y basis as it had reported a profit of 470 crores in
June 2019.
• Hence we can say that lockdown had a very small impact on the business of Cipla
in the starting days but Cipla managed to develop a good business strategy and
increased its profit growth significantly in the 1st quarter of 2020 amid lockdown.

8. Banking Sector
• As a result of social distancing, an increasing number of consumers are using
online banking channels to manage their money
• This is likely to result in a more permanent shift in customer preferences to digital
channels and an increased demand for digital services of banks
• Even with the Indian government’s stimulus packages and Reserve Bank of India’s
(RBI) liquidity measures, banks can expect an increase in loan defaults as
borrowers across customer groups struggle to make payments in the face of an
economic crisis resulting from lost business and jobs
• Besides the moratorium facility announced by the RBI for all term loans, as part
of the COVID-19 package, lenders should consider proactively restructuring loans
to reduce the cash flow burden in the near term, thus reducing defaults in the
immediate future.
• The industry must work together to make the financial relief process quick and
easy to deploy

9. Analysis of impact on companies in Banking sector
HDFC Bank
• HDFC bank is the largest bank in India with the Market capitalization of 6.53 lakh
Crores
• HDFC Bank on Saturday reported a net profit of ₹7,513.11 crores in the quarter
ended September 30 2020, marking an increase of 18.41% compared to the
corresponding period a year ago
• Net NPA had also decreased to 3279 crores in the June quarter from 3542 crore in
the march quarter of 2020
• HDFC Bank posted a 19.58 per cent year-on-year rise in net profit at Rs 6,658.62
crore for the quarter ended June 30
• The figure stood at Rs 5,568.16 crore in the corresponding quarter last year. But
there is a fall of 4.87% on Q-o-Q basis as the figure stood 7296 crores in the
march quarter of 2020

10. Kotak Mahindra Bank
• Kotak Mahindra Bank is second largest bank in India with a market capitalization
of 3.1 lakh crore as of 29 Oct 2020
• It reported 26.27 per cent year-on-year (YoY) rise in standalone net profit at Rs
2,184.48 crore for the September quarter. The private lender had reported a
profit of Rs 1,724.48 crore in the same period a year ago
• Net interest income (NII), rose 16.8 per cent to Rs 3,913 crore from Rs 3,350 crore
in the year ago quarter
• At the end of the quarter, gross NPA was 2.55 per cent and net NPA 0.70 per cent
as compared to the net NPA 0.89% in the previous quarter.
• The standalone profit was 1595 crore in Dec 2019 i.e. pre Covid period, which is
less than the profit during pandemic time that means the bank is not affected by
the Covid-19.

11. State Bank of India
• SBI is the largest Public bank of the country with the market capitalization of 1.68
lakh crore.
• It reported net profit of 5203 crores in the first quarter of FY21 which is 14.17%
rise from the previous quarter.
• Its Net NPA has also reduced to 1.86% in the 1st quarter of 2020 from 2.23% in
the 4th quarter of 2019.
• In the pre Covid period i.e. in 1st & 2nd quarter of 2019 its net profit was 3383
crore & 3645 crore respectively. It shows that SBI is also performing well in the
pandemic period
• Hence we can conclude that banking is also one the few sectors that has not
suffered much from this pandemic and has the potential to take the depressed
sectors out of this slowdown by providing them finance at reasonable rates

12. Information Technology Sector
• The size of IT industry in India is of $181 Billion as of 2019 and is estimated at around
US$ 191 billion in FY20, growing at 7.7% y-o-y
• its contribution to India’s GDP was 7.7% in 2017
• Amidst the challenging situation due to pandemic that the IT industry is witnessing, the
companies are expected to significantly see their growth slow
• The revenue is expected to be reduced by approximately 2-7% largely impacted by the
slowdown in decision making, delay in pipeline conversion and project execution and
pricing impact on core business
• Companies are now are adopting work from remote location, thereby requiring more
cloud services and IT applications to effectively enhance and strengthen their
information related security from cyber attacks Which can add new customers to the IT
companies
• So on one side, when IT industry is expected to witness pressure on new contracts and
pricing, there are segments within the IT domain wherein outsourcing is anticipated to
increase.

13. Analysis of impact on companies of IT sector
Tata Consultancy Services
• TCS reported a 7.05 per cent year-on-year decline in its consolidated net profit at
Rs7,504 crore for the second quarter ended September 30, 2020. The company
had posted consolidated net profit of Rs8,042 crore in same quarter of last
financial year.
• On the quarterly basis, the consolidated profit rose 6.45% per cent from Rs7,049
crore in June quarter of current financial to 7504 crore in the September quarter
• It reported 13.81 per cent year-on-year (YoY) fall in profit at Rs7,049 crore for the
first quarter ended June 30 and almost similar fall on QoQ basis.
• Its share price hit 52 Week low on 13th march 2020 at Rs1506 and by the end of
May it hit Rs2000 and currently its trading around Rs2800.

14. HCL Technologies
• HCL Technologies posted a 31.70 per cent year-on-year (YoY) rise in net profit at
Rs 2,925 crore for the quarter ended June 30
• It had posted a net profit of Rs 2,220 crore in the corresponding quarter last year.
• Consolidated revenue of the company increased 8.60 per cent YoY to Rs 17,841
crore in Q1FY21.
• HCL Technologies Ltd posted a net profit of Rs3,142 crore; up 7.4% quarter-on-
quarter (q-o-q) and 18.5% year-on-year for the quarter ended September '20.
• Its revenue grew 4.2% q-o-q to Rs18,594 crore in the quarter under review, from
Rs17,528 crore in the corresponding quarter last year, with a sequential revenue
growth of 4.5% in constant currency terms and 21.6% EBIT (earnings before
interest and tax) margin.
• Hence HCL technologies has no impact of corona on its revenue and profit and is
continuously growing at a very good rate.

15. Infosys
• Infosys, India's second largest software services provider reported 20.5 per cent
year-on-year (YoY) increase in the net profit for the September quarter.
• The company posted ₹4,019 crore profit for the corresponding quarter last year.
Consolidated revenue from operations increased to ₹24,570 crore in Q2FY21, up
by 8.6% YoY. The operating profit also rose to ₹6,228 crore, growth of 26.8% YoY
• Infosys posted a 11.5 per cent year-on-year (YoY) growth in net profit at Rs4,233
crore for the quarter ended June 30. It had reported a net profit of Rs3,798 crore
in the corresponding quarter last year
• Consolidated revenue of the company increased 8.5 per cent YoY to Rs23,665
crore in Q1FY21, over Rs21,803 crore in the same period last year
• So we can say that Infosys has also not been impacted by the pandemic and has
performed well amid lockdown.