One person has died and over 80 have tested positive for Covid-19 in India, with hundreds in quarantine across the country.
Credit pressures have intensified on India Inc as the coronavirus spread deepens in India and across the globe, leading domestic credit ratings agency Crisil said on Friday. Airlines, hotels, malls, multiplexes and restaurants will be the worst hit businesses, it warned.
One person has died and over 80 have tested positive for Covid-19 in India, with hundreds in quarantine across the country. In response, the government has suspended visas till April 15, barring a few cases, and state governments have adopted strategies like closing cinema halls.
“Clampdowns are increasing both within and outside India, which would curtail consumer mobility and lead to deferral of spending,” the agency said. Apart from the sectors bearing a direct impact, demand for eggs and poultry could also be impacted, it said. The information technology sector can also be affected because of physical restrictions, it added.
“Lower business volumes and occupancies, and suboptimal efficiencies will impact the profitability of companies. While some affected companies may initiate cost-curtailment measures, these may not be enough given high fixed costs,” Crisil’s Senior Director Subodh Rai said. He added that such impact can impair credit profiles of companies.
The agency said near-term liquidity is critical for ensuring confidence in timely debt servicing as businesses adjust to the fast-changing operating environment. The agency said 875 companies it has ratings on can get impacted because of the coronavirus-related troubles.