Business

Coronavirus hits cash flows of 80% companies, normalcy seen resuming in 3-6 months: Survey

Updated : March 23, 2020 04:28 PM IST

FICCI Survey says a significant 53 percent of Indian businesses have witnessed marked impact on operations already due to the novel coronavirus or Covid-19 pandemic.

While travel and tourism remains one of the worst hit sectors, other businesses like poultry and livestock are also staring at massive losses.

Industry body FICCI’s survey of 317 companies on the impact of Coronavirus pandemic on Indian businesses suggests that a significant 53 per cent of Indian businesses have witnessed marked impact on operations already.

Many states, including the production and financial hubs like Maharashtra and Punjab have announced lockdowns in over 82 districts. While travel and tourism remains one of the worst hit sectors, other businesses like poultry and livestock are also staring at massive losses. Industry captains see huge job losses in both formal and informal sectors if the government does not announce supportive measures soon enough.

In the survey, almost 75 per cent of the respondents indicated a 20 per cent or more decrease in orders.

With showrooms shut across the country, many dealers are also grappling with high inventories. Around 35 per cent of the respondents indicated an increase in inventory levels, with half of them saying their inventory had risen by 15 per cent and more.

All of this is having an impact on corporate cash flow with as many as 80 per cent of respondents reporting a decrease in cash flow.

The series of shutdowns will have a domino impact on the economy and it is expected that sentiment could take a while to recover. Almost 80 per cent of the survey respondents feel that the situation might get worse and could take six months to come under control.