Homefinance News

Find out how coronavirus is impacting all industries; aviation, hospitality worst hit

Find out how coronavirus is impacting all industries; aviation, hospitality worst hit

Find out how coronavirus is impacting all industries; aviation, hospitality worst hit
Profile image

By CNBC-TV18 Mar 18, 2020 10:09:24 PM IST (Published)

The novel coronavirus outbreak is causing serious concerns across India with three deaths reported as of March 18 and confirmed cases rising to 151. Precautionary measures are in place and those with symptoms and travelling from affected countries are being quarantined.

Recommended Articles

View All

However, the economic blow from COVID-19 to countries is quite alarming. Here’s a look at how various sectors in India have been impacted.
Banking sector:
Banks across India are working at almost full strength to ensure availability of essential banking services to customers. CNBC-TV18 spoke top private and public banks to assess the damage the virus has caused to the sector.
One of the top private banks in the country said that the bank's branches are functioning normal, and no work from home policies have been implemented. “Banking is an essential service, we can't just ask our employees to leave,” said a senior executive from the bank.
“Whatever corporate functions can be carried out from outside locations or homes are being carried out remotely,” he added, saying whoever has requested for leaves due to health reasons has been granted leaves, but branches have the usual number of employees to carry out day to day functions.
Another private banker said banking services cannot be scaled back unless there are clear instructions from the government or the regulator to do so, adding that no work from home policy has been implemented so far.
Aviation and hospitality
The aviation industry is the worst-hit among sectors with people cancelling international and domestic business and leisure travel. The impact is visible on hotel business as well and stocks it is airline and hotel stocks that have been the hardest hit during the market meltdown over the last couple of weeks.
E-commerce companies
With an increasing number of people preferring to stay at home, work from home and shop from home, there is a surge in online orders on ecommerce platforms. Amazon, Flipkart, BigBasket and Grofers are witnessing a rise in order inflows.
This has led ecommerce companies to engage more staff and delivery personnel to meet demand, prompting a surge in hiring part-time and full-time employees. E-tailing platforms have seen a 15-20 percent spike in gross merchandise value (GMV) in the first 15 days of March compared to February, and a massive 50 percent growth in GMV in categories such as grocery, health and wellness.
IT sector
The virus has impacted client operations across regions and sectors and the IT industry is expected to witness tremors in H12020. An anonymous survey across senior executives of 10 top IT companies indicated that Q3FY20 (January 2020 to March 2020) and Q1FY21 (April 2020 to June 2020) will see the effect of COVID-19 on earnings. Majority of the players indicated that a recovery should be likely only by the quarter ending December 31.
Sources in these companies confirmed that new contracts worth up to $3 billion have been postponed by clients due to the disruption caused by the coronavirus fears.
The already troubled auto sector has reported a sharp decline in footfalls at showrooms. A survey of major auto dealerships indicated that walk-ins at showrooms have fallen by half in the week following Holi.
From a month ago, walk-ins are down about 45-50 percent, mainly in metros such as Pune, Mumbai, Delhi NCR, and other cities such as Kerala, Karnataka and Tamil Nadu, where the positive cases of COVID-19 are more pronounced.
The startup space in India including those in sectors such as travel, ridesharing, co-working are starting to feel the stress from a dip in consumer sentiment. However, there is some cheer in a couple of sectors like e-pharmacies and online groceries that have seen a big jump in demand due to increase in buying essential goods as there are fears that stores could shut in the near future.
The coronavirus impact is being witnessed in the fast moving consumer goods space with India Inc putting stringent protocols in place to ensure safety of employees. Consumer goods companies rely heavily on on-field, factory and distribution centre staff. To ensure the safety of these employees, companies are encouraging rotation based shifts and minimal workforce in a bid to limit physical contact with one another.
Fintech major Paytm has said that it witnessed a massive surge in digital payments as more people are working from home using digital payments to make purchases. "We have been witnessing 20 percent growth in digital payments as compared to the regular days. Since February, the number of users visiting the Paytm app and the number of sessions per user has also increased," a Paytm spokesperson was quoted as saying.
Check out our in-depth Market Coverage, Business News & get real-time Stock Market Updates on CNBC-TV18. Also, Watch our channels CNBC-TV18, CNBC Awaaz and CNBC Bajar Live on-the-go!