Indian manufacturing industries business prospects will be dented as the deadly coronavirus (COVID-19) continues to prolong and serious disruptions are likely to follow, warned rating agency CRISIL. In its report CRISIL said that COVID-19 will have mixed impact on the corporate sector in the fourth quarter of this fiscal.
Key sectors such as auto components, pharmaceuticals, agro chemicals, and so on may survive for another two months with stocks piled up in godown. Industries will be under pressure once the inventories get sold and the manufacturing sector will see their businesses getting impacted. The report also states that credit profiles of some sectors will be impacted if disruptions continue beyond March.
Solar industry for example could face penalties if they miss the deadline of their projects with possible delay in supply of solar panels. However, some sectors which import heavily from China such as ceramics and plastics can benefit with indigenous manufacturing getting a boost as import volumes will reduce.
Further, sectors like steel, paper, leather, textile, etc. can explore export opportunities with countries across the globe stopping their trade with China. India’s manufacturers can fill the vacuum created by Chinese withdrawals. Other sectors such as aluminum, electronics, and pharma bulk drugs may not be able to take advantage due to heavy domestic consumption.
CRISIL pointed out that with climate conditions getting warmer in the summer months the impact of COVID-19 may get reduced. But in worst case scenario the epidemic may extend to the first quarter of fiscal 2021, intensifying the severity of the negative impact on several businesses.
