Even though there is no risk of coronavirus in India, our country is not untouched by its infection in China. The closed factories in China are going to affect many sectors like steel, oil and gas, pharma, auto and parts, consumer durable, IT and chemicals in India.
India imported $ 52 billion from China from April to December 2019. It had a large share of electrical machines, electronics, organic chemicals and plastics. During this time, India exported $ 13 billion to China.
All sectors of the Coronavirus (COVID-19) Can Have the Following Effects:-
China exports steel to the net. Supplies are closed from China. Due to this, the stock has become more and the pressure in the domestic markets has increased. Along with the weak domestic steel prices, there is a trend of a decrease in prices outside as well. Due to the declining prices of steel, there is a direct impact on the earnings of steel producers. Among the top four steel companies of the country, steel and Tata Steel have the most impact on steel prices.
For Indian pharma companies, the importance of China is quite high. They depend too much on China for raw materials. It is believed that the supply of most pharma companies has been affected. This situation may continue until June. A decrease in supply may continue for even longer. Among the Indian companies, China will have the biggest impact on Laurus Labs. Aurobindo Pharma also buys raw materials from China at 2.5 kg Ton, Lupine 1 kg Ton, and Sun Pharma 0.85 kg Ton. Using these raw materials, these companies make such medicines, which are exported to many countries including America.
China supplies chemicals and other materials on a large scale. These companies have reduced their dependence on China to a great extent, which has been the result of supply difficulties all the time. Domestic companies keep stock for about two months. Dhanuka and Rallis India may be affected by increased prices.
- Oil and Gas
The decrease in demand for Petrochem Middle East (PME) and refined products are going to have an impact on companies in this sector. Lower refining margins will affect Bharat Petroleum, Indian Oil, Hindustan Petroleum and Reliance Industries. Companies like Oil India and ONGC will also be affected by this.
- Auto Parts
It will be difficult to estimate the impact on the auto sector because both the parts seller and the manufacturer in this sector are dependent on China. Hero Moto Corp asks for alloy wheels from China. If imports do not improve in a month or two, then it can be affected. This company has about 45 to 60 days of supply. Apart from this, the import of Bosch can also be affected. Tire companies may benefit as radial imports from China may decline. However, its share in the industry is quite low.