Dixon Technologies, Havells India, Voltas and Cipla are some of the Indian companies that could face issues over the next few months in case the
says. On the other hand, any shift in global supply away from China, it believes, could see some beneficiaries in India like garment and textile exporters which could see busier order books in the short-term.
“Indian electronics and white-goods manufacturers rely heavily on Chinese supplies for television panels, LED chips, compressors for refrigerators and air-conditioners, and motors. There has been a disruption in the supply chain with regards to these critical components for Indian brands. Prices of these products have increased by 5-10 per cent and could increase further if the supply disruption is prolonged,” the CLSA note says.
That said, most analysts have already started to trim global growth (GDP) forecast for 2020 in this backdrop. Global GDP, according UBS for instance, could to 0.7 per cent in the January 2020 quarter (Q1-2020) from 3.2 per cent in the December 2019 quarter (Q4-2019). Though UBS expects growth to rebound in the April – June 2020 quarter, the impact could slow the overall 2020 GDP growth by 20 basis points (bps) to 2.9 per cent.
Stock market impact
“With little evidence of people overly concerned about the coronavirus
outbreak, we do not expect it to be a factor that would exacerbate already-weak consumption demand in India. If the impact on the global economy continues for a longer duration, India could possibly be a beneficiary of positive flows since it appears to be the least impacted market. Nonetheless, parts of the stock market are linked to the global economy and have supply chains in China, which could pose some concern,” the CLSA note says.