COVID-19 Impact - How Different Sectors of Economy Affected

Ever after since the COVID'19 Pandemic has hit India, almost every sectors of the economy were badly affected, but there were 3 sectors which had a direct impact due to COVID'19 Virus outbreak, which means the impact of COVID'19 was first seen on these sectors.

The 3 sectors directly affected were:-

1. Tour and Traveling (Aviation sector)

2. Hospitality sector (Hotel industry)

3. Entertainment sector (Movie Theatres)

The overall contribution by various sectors in GDP of India totals to about 35%.

Such contribution was adversely impacted. The recovery of such sectors are said to be “U- shaped” recovery, i.e., recovery of such sector does not jump constantly but grows back slowly and steadily to normal and then shows any sign of growth.(Terminology.com),

The other term which is commonly used is the “V-SHAPED” recovery, which is commonly seen in growth of those sectors which operates in necessity commodities such as food grains, etc. (Terminology.com)

Talking about the first sector, i.e., tours and travels which includes majorly impacted Aviation Industry. The impact of the pandemic on such companies which operates in Aviation sector are:-

Spice jet, the share was badly affected and the last trade price of was reported to ₹40.85 as per quarter 3 reports which were available. The net revenue earned were ₹3500 crore in comparison to last year which had hiked by 48%, the operating profit margin of the company showed a significant rise of 120% in comparison to its peer company i.e., Indigo. The fall in share price was more in comparison to its competitor, i.e., Indigo, which had come down by 50%.

The second sector includes Hotel Industry. The major player which are listed on stock market are:-

IHCL (INDIAN HOTELS COMPANY LTD) which was established in year 1899 and was run by TATA GROUP. 

Its share price was badly affected and fell down to ₹64.10. As per quarter 3 reports of 2019, the net revenue was about ₹1373 crores which had showed a jump of 3%. Since last year, the operating profit of the company is 14% in comparison to its peer competitor which is Lemon Grass, the company seems pretty solid but badly affected by the pandemic.(SOURCE:-money control.com)

Coming up to the last sector, PVR cinemas is one of major players particularly under this sector which runs its operations over 170 location and has about 800 screens across India. 

                                                       

The share price of the company used to trade at ₹2000 at a time but now it is badly affected and fell down to ₹831.50 which amounts to be about 60% fall in share price. (SOURCE:-money control.com)

The revenue of the company as per 3rd quarter of 2019 showed a net revenue of ₹916 crores which is 8% increase as per last years.

So if you have already invested in such sectors there is probably a chance that you have already made a loss in the amount invested in them but if we still consider to buy them in the current situation it would a risky affair but still the chances to gain out of these companies are quite good.