Last updated: 27 Aug, 2021 | 11:14 am
The COVID-19 pandemic has impacted most businesses in the last 18 months. Some of the businesses recovered from the impact, while some are still struggling.
Most companies have shown excellent growth numbers Y-o-Y due to the low base in FY20. However, an important question investors must ask - Has the sales for most of the companies returned to the pre-covid level?
In this article, we will have a look at the Q1FY22 performance of companies and try to answer the above question.
Below are some interesting data pointers for investors, created after studying 3008 companies (an analysis by CARE Ratings):
The consolidated performance
The below table shows the Q1 comparison of the last three years and how different parameters have turned out for companies. Needless to say, 2020 over 2019 was a bad year for the companies, and most numbers are negative.
Let us look at each important parameter one by one -
Performance of different industries
The study of industries is also interesting as COVID has impacted different industries in different ways. There are some industries like healthcare and FMCG that have done better both in 2020 and 2021 lockdowns. While industries like hotels, entertainment have been significantly impacted due to lockdown. Even when the lockdown was not there, the engagement level was nowhere close to normal.
Here are some interesting numbers from the above table -
Industries with higher growth/turnover
The below table shows industries that have grown in terms of turnover in 2021 relative to 2019.
The clear winners are banks, finance, Agri, telecom, IT, and healthcare. These are the industries investors should keep an eye on as they are most likely to drive economic growth this year.
Let us now have a look at how different industries have performed in some detail:
Information Technology - IT industry has been least impacted by the lockdowns. The industry has given impressive growth numbers on account of large deals flows. With lockdown, many large companies decided to go digital, and hence a lot of new projects have come that have increased the sales numbers.
Automobile - The automobile industry recovered in the second half of FY21, but later the momentum stopped with the second wave of COVID. The numbers are back on track in Q1FY22 as the automobile exports have locked up because of the increase in international demand.
FMCG - The industry benefited from the continuation of business activities as the lockdown was mostly staggered this time, unlike the complete lockdown last year. Consumer discretionary spending witnessed a sequential derailment in the first quarter of FY22. One area where momentum continued is personal care and hygiene.
Consumer Durables - The industry has witnessed negative growth relative to 2019. It is mainly because the peak season of sales (summer) was affected by the localized lockdowns. The industry has also been impacted by the increase in the cost of electronic components and metals. It has reduced the margins of the companies in this industry.
Airlines, leisure travel, hotels - These are the most hit industries because of Covid. However, the industry is seeing a rebound. Since June, more and more people are making travel plans and going out on weekends.
The airline industry has not only been impacted by Covid but also by an increase in fuel prices.
Drugs and Pharmaceuticals - The segment has seen good growth numbers as the demand for trade generics, consumer wellness products, and branded prescriptions remained robust.
Realty - Despite the disruption caused by the second wave, the industry witnessed an increase in demand for the residential business. As most companies continue to operate remotely, the rental business saw a slowdown.
The growth in the housing market was led by Bengaluru and Mumbai during Q1FY22. The market sentiments were boosted by historic low home loan rates and government interventions like stamp duty waivers.
Telecom - Telecom is one industry that is not affected by the second wave (COVID in general). With the increase in the 4G customer base, the industry saw growth in net sales year-on-year.