The outbreak of COVID19 which is said to be a respiratory disease has bought social and economic life to a standstill position with no advance treatment or vaccine available. The project aims to inform about the impact of covid19 on the Indian economy. It aims on providing impact of covid19 on three different sectors i.e Banking, FMCG and Pharmaceutical. I have used secondary data to analyse the influence of covid19 on the change in the stock price of the company. The companies used in the paper are HDFC bank and ICICI bank from the banking sector, Britannia, and Godrej consumer products from the FMCG sector , Dr.Reddys laboratories and Sun Pharma from the Pharmaceutical sector.

1. THE NEW NORMAL: ANALYSIS OF
COVID19 IMPACT ON THE INDIAN
STOCK MARKET
BY-AARON ANDRADE

2. “It’s one small step for man, one
giant leap for mankind.”
- NEIL ARMSTRONG

3. ABSTRACT
The outbreak of COVID19 which is said to be a respiratory disease has bought social and economic life to a
standstill position with no advance treatment or vaccine available. The project aims to inform about the impact of
covid19 on the Indian economy. It aims on providing impact of covid19 on three different sectors i.e Banking,
FMCG and Pharmaceutical. I have used secondary data to analyse the influence of covid19 on the change in the
stock price of the company. The companies used in the paper are HDFC bank and ICICI bank from the banking
sector, Britannia, and Godrej consumer products from the FMCG sector , Dr.Reddys laboratories and Sun
Pharma from the Pharmaceutical sector.

4. IMPACT ON FINANCIAL MARKET
Due to the uncertainty of no proper treatment for the virus and rise in the number of cases daily ,this led to a
high volatile market which impacted consumption level of the economy and further led to crashes and
wealth erosion. This created a panic situation for the investors in the Indian stock market.
The domestic equity markets on March 12, when both BSE Sensex and NSE Nifty50 crashed by more than
8% in a single day, this drastic fall reportedly wiped out Rs.10 Lakh crores of market capitalisation in a
single day.
The NSE Nifty fell by 868 points whereas BSE Sensex fell by 2919 points. The fall continued as investors
resorted to sell amid rise in coronavirus cases.

5. On March 19, the market plunged to a new low when Sensex closed 581 points lower falling to 28288 and
Nifty fell 205 points to end up at 8263.
On March 23,2020 it was seen to have the worst devastating effect on Nifty since the Global Financial Crisis
when Nifty was halted from trading for 45mins when it reached the circuit of 10% due to the uncertainty
caused by the coronavirus pandemic. Nifty tanked 1135 points and closed at 7610. The BSE Sensex closed
13% below 25981.
Investors lost more than Rs 33 lakh crore in a single month as the average market capitalisation of BSE
listed companies fell from Rs.146.87 Lakh cr on February 28 to Rs 113.48 recorded on March 31.

6. SECTORAL IMPACT OF COVID19 ON INDIAN STOCK
MARKET
Banking Sector
Banks play a key role in the entire financial system by mobilizing deposits from households spread across
the nation and making these funds available for investment, either by lending or buying securities. Today the
banking industry has become an integral part of any nation’s economic progress and is critical for the
financial wellbeing of individuals, businesses, nations, and the entire globe.

7. Company Overview
HDFC
Graph Analysis (1y)
December 19,2019 HDFC bank stock hit a high
of RS1305.50 per share .
March 24,2020 HDFC bank stock hit a low of Rs
738.75 per share due to the pandemic.
October 16,2020 HDFC bank reports a 18.4%
jump in the Q2 profit Rs7513, NII rises 16.7%

8. Covid19 Impact
The share price of HDFC Bank had fallen 31% between January 1 and March 20; most banking stocks have
taken a beating, especially over the last week, with loan portfolios expected to deteriorate following the
Coronavirus crisis. The concern stems from the assumption that HDFC Bank’s asset quality will worsen due
to the current state of near lockdown in some parts of the country.
Measures
The structural drivers are in place for HDFC Bank, helping it gain market share, aided by operational
efficiencies and best-inclass asset quality. The top management succession will be keenly watched, and the
bank has already finalized three candidates to succeed Mr. Aditya Puri (whose term ends in October 2020)
and has now indicated that there may be an internal candidate for the same.

9. ICICI
Graph Analysis (1y)
December 30,2019 ICICI bank stock hit a high of
RS552.20 per share . (H)
March 24,2020 ICICI bank stock hit a low of Rs
268.30 per share due to the pandemic. (L)
October 26,2020 ICICI bank shuts down
operations in Sri Lanka (N)

10. Covid19 Impact
Loan growth was impacted by lower credit demand while fee income declined due to lower borrowing and
investment activity by customers and lower consumer spends. The slowdown in the economy is expected to
result in higher additions to non-performing loans, increase in provisions, lower loan growth and fee
income.
Share prices dropped drastically.
Measures
In the quarter ended March, ICICI Bank has made a Rs 2,725 crore provision to cover the likely risks from
COVID-19 lockdown. Provision refers to the money set aside by banks to cover risky loans.

11. Pharmaceutical Sector
Industry Overview
The Indian pharmaceuticals sector is the third largest in the world with production that satisfies 60% of the
total demand of vaccines used globally. India’s Active Pharmaceutical Industry (API) was expected to
generate about $6billion by the end of Fiscal year, 2020. The rise of covid-19 has exposed India’s
dependency on China for acquiring API. Due to disturbance in the supply chain across the globe, attaining
API for production of hydroxychloroquine (HCQ) which is one of the key drugs recommended for treating
the virus. The disrupted chain has caused raw material prices to shoot up amid limited supply and has made
it extremely difficult for manufacturers of generic drug to conduct trials or launch new products

12. India enjoys an important position in the global pharmaceuticals sector. The country also has a large pool of
scientists and engineers with a potential to steer the industry ahead to greater heights. Presently, over 80 %
of the antiretroviral drugs used globally to combat AIDS (Acquired Immune Deficiency Syndrome) are
supplied by Indian pharmaceutical firms.
Amidst the chaos of a pandemic, unlike other sectors, the pharmaceutical sector is expected to show positive
returns as investors devoted their attention and money here, hoping that the vaccine, If and when created
would prove to be a beneficial investment

13. Company Overview
Sun Pharma
Graph Analysis (1y)
February 17,2020, Dividend interim Rs300.00
March 30,2020 Sun pharma stock hit a low of Rs
312.00 per share.
The next following day it started getting bullish
due to the pandemic.
August 28,2020 Sun pharma stock hit a high of
Rs564.75.
September 23,2020 Sun pharma share price rises
2% on launch of ILUMYA in Japan

14. Covid19 Impact
Before the prevalence of this pandemic, Sun Pharma’s performance was low and it gave negative returns for
almost 3 years. It’s market price on March 20,2020 was at INR 365.25 which was more or less a constant
rate at which it was traded. Post covid, it’s market prices are being traded in between the range of 400-500 in
the past few months. This growth could be an event-driven growth that may fade away in long term.
Although we have seen positive results and outcomes.

15. Measures
According to the managing director of the company, Dilip Shanghvi, they are continuing to focus on
minimizing losses and controlling costs while improving efficiencies in their entire line of businesses. They
believe that Covid-19 is going to have an impact on how they operate and conduct their business for at least
a short period of time. They have a few key areas they want to focus on:
 Employee protection and keeping their workplace safe and coronavirus free
 Digital engagement with doctors and patients:
 Protecting the supply chain, ensuring maximum utilization of their facilities; working closely with
vendors to continue supply along with improving productivity and efficiency, enabling work from home
for employees wherever and whenever necessary
 Focusing on collecting cash, preserving cash, and wherever possible, finding a way to reduce the overall
debt of the company

16. DR. Reddy’s Laboratories
Graph Analysis (1y)
March 19,2020 DR.Reddys Laboratories stock
hit a low of Rs 2495.05 per share.
The next following day it started getting bullish
due to the pandemic.
September 21,2020 DR.Reddys Laboratories
stock hit a high of Rs5512.65

17. Covid19 Impact
The threats imposed by Covid-19 came in multiple folds. Supply chains were disrupted, immediate
lockdown imposed almost all over the world, especially India. Within 2 days of the breakout, the
government of India decided to go a complete lockdown creating with manufacturing and distribution
channels which resulted in losses in revenue due to forced shutdown. However, Dr. Reddy’s being a
pharmaceutical company came under essential items and so its operations went on even with the lockdown
but by ensuring utmost care and following all procedures.
Just like Sun Pharma, Dr. Reddy’s pre-covid performance was pretty low and it had been giving negative
returns for quite some time. The market price closed at INR 2897.25 on 20th March,2020 and it had been
trading in the range of 2500-3000 in the past six months. It was only after the Covid-19 outbreak that it saw
a growth and started gaining positive returns. It started trading in the range of 4000-5500 recently. This
positive return hints towards an event-driven growth and may not last in the long term.

18. Measures and Future prospects
Dr.Reddy’s highest priority in these dreary conditions remains to be the health, safety and security of their
employees, suppliers and partners along with keeping their commitment to patients and customers to deliver
affordable health care medicines. The various activities they have engaged in, to contain and cope with the
global pandemic, are:
 Employee safety and well-being
 Continues supply of medicines: Being a global pharmaceutical company and leader in generics, it remains
persistent in its commitment to deliver affordable and quality medicines to its patients and customers
 Donations to Covid-19 support Programmes
 Production of sanitizers:

19. Dr. Reddy’s partners with Fujifilm and Global response Aid (GRA) for Avigan, a favipiravir, which could
potentially be a treatment for Covid19. Dr. Reddy has exclusive rights of manufacturing and has granted the
rights to develop, sell and distribute Avigan in all countries other than China, Japan and Russia. Dr. Reddy’s
has exclusive rights to developing, selling and distributing Avigan all over India. Fujifilm is currently
conducting a clinical trial on Avigan focusing on Covid-19 patients in Japan and in the USA and is working
to increase its production by partnering with domestic and overseas firms. The product will be introduced in
the market once all applicable approvals have been sought.

20. FMCG Sector
Industry Overview
Fast-moving consumer goods (FMCG) sector is India’s fourth largest sector with household and personal
care accounting for 50% of FMCG sales in India. Growing awareness, easier access and changing lifestyles
have been the key growth drivers for the sector. The urban segment is the largest contributor to the overall
revenue generated by the FMCG sector in India.
However, in the last few years, the FMCG market has grown at a faster pace in rural India compared to
urban India. Semi-urban and rural segments are growing at a rapid pace and FMCG products account for
50% of the total rural spending.
The retail market in India is estimated to reach US$ 1.1 trillion by 2020 from US$ 840 billion in 2017, with
modern trade expected to grow at 20-25% per annum, which is likely to boost revenue of FMCG companies.

21. Company Overview
Britannia Industries Ltd
Graph Analysis (1y)
March 23,2020 Britannia stock hit a low of Rs
2100 per share due to the pandemic. (L)
July 21,2020 Britannia stocks hit a high of
Rs4010.

22. Covid19 Impact
When the Street started to factor in the impact of covid-19 on consumer goods firms in February and March,
shares of Britannia Industries Ltd were among the worst hit. In the markets’ recovery phase since end-
March, that view has changed completely. Britannia is now the top-performing consumer goods stock, rising
by almost 15% from its pre-covid peak.
Even during the on-going Covid-19, the company expects to continue this stellar performance. Britannia’s
manufacturing and supply levels are back to pre-covid numbers.

23. Measures and Future Prospects
For the future, the company is expanding its distribution reach to the rural areas. With a pump-up in volumes
and the expectation that this growth will continue in the coming quarters, Britannia is trying to turn Covid19
into an opportunity.
By partnering with delivery apps like Dunzo, the company is trying to supply essential products like
biscuits, wafers, cakes, milkshakes and ghee to urban and rural areas. Dunzo would source the product from
the distribution centres and deliver them through the no contact delivery rule.

24. Godrej Consumer Product
Graph Analysis (1y)
January 16,2020 Godrej stocks hit a high of Rs
772 per share.
March 23,2020 Godrej stocks hit a low of
Rs425.10

25. Covid19 Impact
Godrej Consumer Products did not see any major
growth during this lockdown according to its
Q1FY2020 report.
Due to lock down ordered by the Government of
India across the country to contain the spread of
COVID-19, the operations of the Company have
also been disrupted
Measures and Future Prospects
The company is becoming future ready. They
have initiated projects and are making future
ready investments to ramp up their different
processes. Recent investments such as building
the hygiene portfolio and growth in HI products
have created a strong base for future growth. No
doubt that this quarter Godrej CP has faced
mixed results.