India Perspective COVID 19 PDF

COVID-19
India Perspective 2.0
30 MARCH 2020
Global Overview
• COVID-19 outbreak continues to grow in many areas of the world, especially Europe and
USA, with severe toll on health (37k reported deaths), health care systems, and economies
• Short-term trajectory of outbreak across countries depends largely on what isolation

measures are taken and how strictly they are enforced
Executive • Global equity markets have reacted aggressively to virus' spread beyond China with S&P500
seeing fastest 30% fall in history; Stimulus package announced by US followed by India
resulting in an uplift in Nifty last week
summary Evolving situation in India
(I/II) • COVID-19 cases in India have increased by 2.5x over last week to 1251, with majority of
cases concentrated in 8 states
• Central govt. announced a 21-day lockdown till 14 Apr'20 to contain the spread
Copyright © 2020 by Boston Consulting Group. All rights reserved.

Update as of • Rating agencies have scaled down their GDP growth estimates for India after the
30 March, 2020 announcement of lockdown; New GDP growth estimates ranging between 2.1% to 3.5%
• India's economy has been turbulent in recent past & COVID-19's immediate impact expected
to be felt across key parameters:
– $180Bn annual imports & exports linked to high exposure countries – US, Europe, UK,
Iran
– 25% of total workforce of 496Mn in India are casual labor with high exposure to
economic impacts of COVID-19; ~63Mn casual labor seeing a direct impact from
lockdown
1
Continued…
Evolving situation in India (Continued)
• Impact from lockdown varies across industries creating 5 key archetypes
– Industries like Travel, Auto, Construction, Consumer Durables are seeing a downside
whereas others like Digital Media, Consumer staples, Telecom are seeing an upside
• Wave 1 results of COVID-19 Consumer sentiment research for India reveal the following:
– Essentials, savings, health & wellness, at-home entertainment, and education most likely
to witness an increase
– Travel, outdoor leisure activities and discretionary spending likely to be hardest hit by a
Executive planned reduction in spends
summary • Analysis at a company level highlights that 200-300 of the top 1000 Public Indian Companies
may face liquidity crunch under ~4% to ~16% annual revenue decline situation
(II/II) • Speed to recovery for industries dependent on multiple drivers

– Speeds of recovery from 2008 recession period can act as a starting point
– In parallel, other demand & supply side drivers specific to COVID-19 situation need to be

monitored
Update as of
30 March, 2020 Emerging Macro-scenarios
• Indian economy has shown resilience with past crises, through V shaped recoveries
• For USA, emerging views on COVID-19 indicates a GDP drawdown greater than 2008
• As leaders, need to monitor key indicators to look out for how the scenario develops in India:
– Intensity: Virus properties, Mitigation policies & Healthcare effectiveness, Financial
system liquidity & confidence levels
– Geometry: Time to cure, Disease seasonality, Real economy capital & productivity shock,2
Impact on Global economy
Global overview
Focus of this
Evolving situation in India
document

Emerging macro-scenarios
3
Global Overview
4

Data as of 30 Mar
COVID-19: 781k cases confirmed across 178 countries

US & Italy with highest no. of confirmed infections
Countries/regions reported
…As of Mar. 30, 178 of 195 countries/regions have been affected infections
178
UK Germany World India
France
Spain Iran
USA Italy China Japan Total
Switzerland South cases 781k 1251
India Korea
Total

Cumulative confirmed deaths 37k 32
infections1
161,807
101,739 Fatality
87,956 82,198 rate (%) 4.8% 2.5%
66,885
44,550 41,495
22,141 15,922 9,661 1,866 1,251
Recovery
USA Italy Spain China Germany France Iran UK SwitzerlandSouth Japan India rate (%) 21% 8.2%
USA, Italy & Spain surpassed China in
terms of confirmed cases
Korea
1. No. of infections considered based on confirmed medical tests 1 – 1000 1001-10000 10000+ 5
Sources: Johns Hopkins CSSE; Ministry of Health & Family welfare; BCG analysis
Data as of 30 Mar
Countries are being impacted differently across the globe in terms

of cumulative cases and rate of growth
Daily growth rate of total cases (5-day avg, %)
30
India Reported cases doubling every 3 days

Canada Belgium
US
UK
Portugal
Growth rate
15 Brazil Rest of the world Spain

Austria France Germany
Reported cases doubling every 6 days

Sweden
Iran
Switzerland
Italy
Japan Norway
Greater China
South Korea
0
0 25,000 50,000 75,000 100,000 125,000 150,000 175,000
Cumulative #of confirmed cases

Size
Rest of World Europe North America India
Source: Johns Hopkins CSSE, BCG analysis 6
Cases: Data as of 30 Mar
Tests: Data as of 25 Mar
Countries with low testing rates tend to report fewer cases
Confirmed COVID-19 cases per million people Total # of tests performed2 per million people
10,000.0 1,000,000.00
Italy
Spain Switzerland Italy

1,000.0 Germany
France 10,000.00 Germany
USA South Korea
S. Korea UK USA
100.0 Spain France
China
Switzerland
100.00 Japan
Japan
10.0 India

UK
1.00 Iran
1.0 India
Iran
0.1 0.01
1,000 10,000 100,000 1,000,000 1,000 10,000 100,000 1,000,000
GDP per capita, PPP1 GDP per capita, PPP1
Europe Asia North America South America Africa Oceania
1.GDP per capita is expressed in PPP (current, international dollars) based on 2018 2. Data for Iran is as on 14 Mar; China for data is not available as on date 7
Source: World Bank, Worldometers.info, Johns Hopkins, Media reports
Government responses1
(As of 29 Mar)
Major countries have recently made strong interventions to enforce

social distancing
Non-essential International Domestic Non-essential

School Restricted business travel travel local mvmt.
closure assembly closure restrictions restrictions2 restrictions
China • USA continues to have
Spain limited government imposed
France restrictions on domestic
travel
Switzerland
Italy
Iran • Germany announced nation

Denmark wide coronavirus lockdown
until April 20
Germany
US
South Korea • UK tightened it's social
distancing & non essential
Japan local movement norms
UK levying penalties on breach
India
New interventions
Continuing interventions
post 20 Mar
Note: includes nationwide actions and actions taken by major local or regional governments. 2 Some German + US rail services are being reduced but not through government mandate
International travel restrictions flagged if any bans put in place or limits in place; Internal travel restriction includes reductions in public transport, or restricted access; Non-essential businesses include at
least restaurants, entertainment venues; School closures are any mandatory state closures; Assembly restrictions include mandatory and advised restrictions on large groups, restrictions on e.g. faith based 8
gatherings; Non-essential local mvmt includes stated restrictions on being outside or curfews | Source: Government and media reports
Data as of 30 Mar
Countries following similar exponential growth path until major

interventions made
Total cumulative number of confirmed cases (Log scale)
1,000,000 Lockdown measures seem to be
Italy locked down on Average growth line
11/03 (12,462 cases)
effective in slowing down outbreak
USA China – COVID-19 spread in Greater
Spain Italy
Germany China now contained
France Iran
Hubei locked UK – Early signs of slowdown in
down on 23/01 Switzerland
10,000 (444 cases) S. Korea
Italy
Learning from global peers, India

has made intervention at an earlier
India Japan
stage of outbreak
South Korea managed to contain

France locked down on
100 17/03 (7652 cases)
outbreak without nation-wide
lockdown by large-scale testing and
India locked down on individual quarantines early on
22/03 (396 cases)
0 10 20 30 40 50 60
Number of days1
1. No. of days after exceeding 60 confirmed cases
Source: Johns Hopkins CSSE, Government and media reports, BCG Henderson Institute analysis 9
Data as of 30 Mar
Global equity markets have aggressively priced risks following

spread to the world, with slight recovery in the last week
Inflection with virus' spread to

Markets looked past COVID-19's spread in China
Europe, USA and beyond
Cumulative returns (%)
5
0 Feb. 21
-5
-10 Japan (Nikkei 225)

-15 U.S. (S&P 500)
-20 Korea (KOSPI)
-25 UK (FTSE 100)
-30 German (DAX)
-35 India (Nifty 50)
21- 27- 3- 10- 17- 24- 2- 9- 16- 23- 30-
Jan Jan Feb Feb Feb Feb Mar Mar Mar Mar Mar
Stimulus package announced by US

followed by India resulting in an uplift in
Source: Bloomberg; BCG Center for Macroeconomics analysis Nifty last week 10
Data as of 30 Mar
Global & Indian indices fell by ~35% in 6 weeks (till 23 Mar),

showing a pick-up post that
Major equity market drawdowns since 1980 2/19/20 – 3/30/20
0%
S&P 500 drawdowns
-10%
COVID
-20% 10/7/97 –
10/27/97
-30% 7/16/90 – 3/24/00 –
10/11/90 10/9/02
9/20/18-
-40% 11/28/80 – 10/9/89 – 7/16/99 –
12/24/18
8/12/82 1/30/90 10/15/99
-50% 2/13/80 – 10/10/83 – 8/25/87 – 7/17/98 – 10/9/07 – 5/21/15 – 1/26/18 –
3/27/80 7/24/84 12/4/87 8/31/98 3/9/09 2/11/16 2/8/18
2/19/20 – 3/30/20
Sensex drawdowns
0%

-10%
-20% COVID
-30%
-40%
Correction line (-10%) 12/27/02 – 1/15/08 – 5/21/15 –
-50% 3/31/03 3/31/09 2/12/16
Bear market line (-20%)
• S&P 500 index fell 30% in 22 trading days from 19th Feb, making it the fastest fall from peak in history
• Market has continued to decline due to COVID-19, at a much faster pace on both indexes than SARS
(2002); it is comparable or even faster than 2008 recession
Source: Bloomberg; BCG Center for Macroeconomics analysis 11
Early signs show China headed towards normalcy…
80% recovery of daily coal 50% recovery of property 40% recovery of metro
work resumed3 consumption1 (by Mar 24) transaction (by Mar 24) passengers2 (by Mar 24)
90+% (by Mar 17)
65 4,520
70 2019 metro
Traded area of buildings in top 30 cities

2019 Property 4,020
Sum of daily Metro passenger in 8

60
Daily coal consumption (10k tons)

provinces 2019 Coal consumption 60 transactions
55 3,520
announced to
12
cities (10k person)

50
resume schools 50 3,020
in late Mar/early 45 40 2,520

Apr (by Mar 20)

40 2,020
30
35 1,520
20
30 2020 coal 1,020
national attractions
consumption
25 10 2020 Property 2020
reopened 25
transactions
520
metro
(by Feb 20) 20 0 20
12
17
22
27
32
37
42
-18
-13
-8
-3
2
7
12
17
22
27
32
37
42
-18
-13
-8
-3
2
7
10
14
18
22
26
30
-18
-14
-10
-6
-2
2
6
Weekdays relative to Chinese New Year Weekdays relative to Chinese New Year Weekdays relative to Chinese New Year
1. Sum of Jerdin Electric, Guangdon Yudean Group, Datang International Power Generation, and Huaneng Power International, Inc.
2. Sum of Shanghai, Guangzhou, Chengdu, Nanjing, Xi'an, Suzhou, Zhengzhou, Chongqing 12
3. NDRC official statistics; Note: recovery defined as consumption of 2020 vs. 2019, based on the same weekdays relative to Chinese New Year; Source: WIND, NDRC
Evolving Situation in India
13

Data as of 30 Mar
COVID-19 cases in India have increased by 2.5x over last week, with
majority of cases concentrated in 8 states
No. of COVID-19 cases in India have been on the rise

752 new cases added in India from last week; 2.5x Ladakh (13)
Jammu and Total no. of incidents: 1251
32 deaths recorded till date 1,251 Kashmir (48) No. of deaths: 32
Himachal Pradesh (3)
Punjab (38)
Chandigarh (8) Uttarakhand (7)
1,024 Haryana
Delhi (87) (36) Meghalaya
987
Uttar
887 Rajasthan Pradesh
(59) (82) Bihar
(15)
Manipur (1)

Madhya Pradesh
657 660
4.4x (47)
Chhattisgarh
Mizoram (1)
No of cases remained 536 Gujarat(69) (7)
499 Odisha West Bengal
stagnant for a month Maharashtra (3) Very High : >=10%
(198) (22)
2.3x 330 396 High : >=5%, <10%
244 Telangana (71) Medium: >1% <5%
110 195 Low: =<1%
100 140 170
Goa(5)
65 Andhra Pradesh (23) Grey: No incidents
37 114 Karnataka(83)
77 85
32 33 34 43 50 65
1 1 1 2 3 6 9 Pondicherry (1)
1-Feb
2-Feb
3-Feb
30-Jan
31-Jan
2-Mar
3-Mar
4-Mar
5-Mar
6-Mar
7-Mar
8-Mar
9-Mar
10-Mar
11-Mar
12-Mar
13-Mar
14-Mar
15-Mar
16-Mar
17-Mar
18-Mar
19-Mar
20-Mar
21-Mar
22-Mar
23-Mar
24-Mar
25-Mar
26-Mar
27-Mar
28-Mar
29-Mar
30-Mar
Kerala Tamil Nadu (67) Andaman
(202) and Nicobar Islands (9)
Source: Ministry of Health & Family welfare; Johns Hopkins CSSE, World Health organization 14
Non exhaustive Data as of 30 Mar
India announced total lockdown for 3 weeks entailing strict orders

to be enforced
Travel advisory Social distancing Testing & quarantine
All transport services All educational and religious establishments to First and second
suspended including air, remain closed coronavirus tests made free
rail & roads, except All social, political, sports, cultural gatherings for all
banned
• Transportation for all Strict home/institutional
medical personnel, All commercial and industrial establishments to be quarantine measures in
nurses, para-medical closed down barring a few exceptions such as: place for people arrived
staff, other hospital • Establishments into production, selling and from international
support delivery of essential goods destinations

• Banks, insurance offices & ATMs, Capital & debt
• Transportation for
market services
essential commodities
• Power generation, transmission & distribution
• Fire, law and order and services, etc.
emergency services All government & semi- government offices to
close down except ones dealing with national
security, public utilities, disaster management,
etc.
Legal implications to be invoked in case of breach of prescribed norms
Source: Ministry of health & family welfare, Press release; Ministry of Home Affairs, Media reports 15
Indian GDP forecasts revised downwards over the last one month
GDP growth %
(Y-on-Y)
-3.9
-1.7 -1.7 -2.8
6.0
India GDP 5.2 5.2 5.3
3.5 3.5
growth forecast 2.5 2.1
for 2020 / FY21
Pre-lockdown forecasts1
S&P Global Ratings CRISIL Ltd. Moody’s Economist
Post-lockdown forecasts2 Investor’s Service Intelligence Unit (EIU)
GDP growth %

(Y-on-Y)
-0.9 -3.1
World GDP -1.2 -3.6
3.3 3.4
growth forecast 2.4 2.5 2.5
1.3
for 2020 0.3
Pre-COVID3 -1.1
Post-COVID4
Deutsche Bank Fitch Ratings Morgan Stanley J.P. Morgan
India: 1. Pre-lockdown forecasts were made during Feb 2020 / early March 2020; 2. Post-lockdown forecasts were made from 27th to 30th March 2020; Source: Reports from Moody's Investor
Service, EIU, S&P Global Ratings, CRISIL Ltd., Press search
World: 3. Pre-COVID forecasts were made during / before December 2019; 4. Post-COVID forecasts were made from 20th to 30th March 2020; Source: Reports from JP Morgan, Deutsche
Bank, Fitch Ratings & Morgan Stanley, Press search 16
Data as of 30 Mar
~$180Bn annual imports & exports linked to high exposure countries

Commodities trade only
Assessment of intensity of COVID-19 impact
Daily growth Non-essential
No. of cases (% increase) local movement Imports value Exports value
till date in cases restrictions Exposure level4 (Annual value1 in $Bn) (Annual value1 in $Bn)
USA 161,807 19.7% 34.9 (7.2%) 54.0 (16.8%)
European countries;
317,052 9.9% 40.7 (8.4%) 25.0 (7.7%)
high COVID-19 exposure2
UK 22,141 18.4% 7.1 (1.5%) 8.9 (2.8%)
Iran 41,495 9.0% 4.4 (0.9%) 4.6 (1.3%)

China 82,198 0.1% 68.4 (14.2%) 16.9 (5.3%)
South Korea 9,661 1.1% 16.1 (3.3%) 4.8 (1.4%)
Middle east (except Iran) 21,479 19.7% 109.2 (22.6%) 56.4 (17.4%)
Others 62,113 12.5% 202.4 (41.9%) 152.4 (47.3%)

Exposure level determination: Red = #cases > 20k, daily growth > 5%, with non-essential movement restrictions; Yellow = #cases > 20k, with non-essential movement restrictions
1. Value of Imports and Exports are for the period Jan-19 to Dec-19; the information pertains to commodity trade only and does not include services
2. European countries having COVID-19 exposure includes Italy, Spain, Germany, France, Switzerland
3. Non-essential local movement includes stated restrictions on being outside or curfews including school closure, international travel restrictions 17
Source: Johns Hopkins CSSE, Comtrade Jan-19 to Dec-19, Global Trade Impact of (COVID-19) epidemic-UNCTAD report, Government and media reports, Press search
Varied impact expected across categories of imports & exports,
based on exposure to high risk countries Commodities trade only
Major imports Major exports

Annual value1 in $Bn) Annual value1 in $Bn)
155.1 61.6 50.3 44.3 20.7 16.8 14.7 119.6 483.0 44.2 35.9 21.9 21.2 21.2 18.4 16.1 144.6 323.7
8% 11% 17% 16% 16% 10%
0% 19% 18% 5% 29% 26%
29% 32% 27% 28%
25% 40% 16% 39% 46%
18% 19% 17% 14% 0% 57% 6%
39% 5%
0% 40% 9% 15% 10% 17% 11% 12%
16% 31% 23% 21% 27%
13% 6% 4% 8% 2% 0%
6%
10% 1%
66% 6% 70% 12%
55% 52% 52% 52% 58% 54%
44% 44% 44% 43% 44% 45% 48%
34% 33% 30%

Mineral Gems, Electrical Nuclear Organic Iron or Plastics Others Total Mineral Gems, Textiles Food Nuclear Organic Pharma- Others Total
oils & precious machin- reactors chemicals steel & & oils & precious & products reactors chem- ceutical
fuels metals ery and & parts articles articles fuels metals apparel & parts icals products
equipment
• India in top 15 economies affected due to supply chain • India’s largest export destinations—USA and EU are current epicenters
disruption in China of COVID-19
• Impact on organic chemicals, gems & precious metals, nuclear reactors & • Impact seen across exports, but mainly on gems and precious metals, textiles
parts & apparel, food products
High exposure countries3 Medium exposure countries3 Low exposure countries3 Others3
1. Value of Imports and Exports are for the period Jan-19 to Dec-19; 2. The information pertains to commodity trade only and does not include services
3. High exposure countries – USA, UK, Italy, Spain, Germany, France, Switzerland, Iran; Medium exposure countries – China; Low exposure countries – South Korea, Middle East (except Iran)
Source: Johns Hopkins CSSE, Comtrade Jan-19 to Dec-19, Global Trade Impact of (COVID-19) epidemic-UNCTAD report, Government and media reports, BCG analysis 18
25% of total workforce in India are casual labor with potential high
exposure to economic impacts of COVID-19
Sector-wise workforce distribution (FY 19)
No. of workers (Mn)
Total 23% 38% 14% 25% 496
Agriculture 1% 48% 25% 26% 217

4% Govt. has initiated certain
Services 75% 20% 2% 66 mitigation measures
• Sectors not tagged as • Increased minimum wage
Manufacturing 42% 35% 7% 16% 61 essential in the temporary rate by INR 20/day
Trade, Hotel & shutdown
29% 53% 11% 7% 61 • GoI to pay 24% EPF
Restaurants • ~63Mn casual labor seeing

contribution for next 3
Construction 6% 0% 84% 59 a direct impact due to mo. for eligible organized
10%
4% shutdown sector establishments
Transport, storage &
47% 48% 1% 28
Communication
• State Govts. to use
Electricity &
78% 14% 6% 3 welfare fund for
Water supply 2%
2% construction laborers
Mining & Quarrying 49% 6% 43% 2
Regular wage/salary Own account worker, employer Helper in household enterprise Casual labor
1. Other services include financial & insurance, real estate, professional, scientific, technical, administrative & support, education, human health, social work, arts, entertainment &
recreation, other service activities, activities of households as employers; Source: Oxford economics estimates of employment FY19, Periodic Labor Force Survey; (PLFS) Jul-17 to Jun-18,
Press search 19
Data as of 30 Mar
Industries are seeing varied impact in short-term amidst restrictions

5 key archetypes emerge
Supply side restrictions
1 1 1
Restricted Partially Restricted Not Restricted
(Non-essential products/ (Depending if product/service is (Essential products/services or not affected by COVID-19 takedown efforts)
services or affected by essential or work from home is
COVID-19 takedown efforts) possible)
Impact of Downside Downside Downside Limited Upsides

Essentials may see upside, however Declining due to overall Business as usual but Shift to online consumption,
restrictions
as a whole declining due to overall decline in economic activity may see some labor, higher demand due to hoarding
(During the
decline in economic activity logistics issues of essentials
shutdown)
• Travel & Tourism • Transportation & Logistics • Energy & Utilities • Agriculture • Media (Digital)
• Auto & Components2 • Metals & Mining • Oil & Gas • Education (Online)

• Building Materials • Machinery • Financials • Consumer-Staples
• Education (Offline) • Aerospace & Defense • Insurance • Food/Drug Retail
• Construction/Infra • Chemicals • Pharmaceuticals
• Consumer Durables • IT, Technology & Services3 • Health Services
• Consumer- • Media (Traditional) • Telecom
Discretionary
• Forest products &
Packaging
• Fashion & Luxury
• Other Retail
20
1. Source for restrictions during the shutdown: MoHA Order 40-3/2020-DM-I(A) dated 24th March '20 2. Auto & Auto Components sector may shift to supply of ventilators; 3. HR Services,
Security, Specialized Consumer Services, Software Services, Communications Equipment, Electronics, IT/IT Services, Tech Hardware
India—Wave 1—March 23-26
Consumer sentiment survey: Essentials, savings, health & wellness, at-home

entertainment, and education most likely to witness an increase
Distribution of survey responses (%)
Change in spends in next six months Top winners
10% 11% 33% 21% 25% Utilities

9% 10% 21% 25% 35% Fresh foods
Essentials for
13% 9% 29% 23% 27% Groceries and staples
daily life
9% 7% 33% 27% 24% Personal care products
12% 10% 29% 17% 32% Household care products
11% 5% 28% 29% 26% Mobile services
11% 8% 28% 24% 28% Home wifi connection
At-home
11% 9% 34% 18% 27% DTH services entertainment/
11% 10% 25% 22% 32% Paid OTT subscription Media

14% 17% 22% 26% 22% Toys and games
12% 11% 22% 21% 34% Savings Saving/
12% 9% 29% 23% 27% Insurance Investments
11% 9% 24% 25% 30% Preventive diagnostics/test
18% 9% 21% 23% 29% Vitamins, herbs, supplements Health &
15% 8% 26% 26% 25% Medical procedures Wellness
14% 11% 25% 20% 30% First-aid
11% 6% 22% 28% 33% Education Education
A lot less Somewhat less About the same Somewhat more A lot more
Note: Question text: “How do you expect your spend to change in the next 6 months across the following areas?” Categories with Top 2 Box > 45% (5% more than average) classified as
winning categories 21
Source: BCG COVID-19 Consumer Sentiment Survey (India), March 23-26 2020 (N = 2,106)
India—Wave 1—March 23-26
Consumer sentiment survey: Travel, outdoor leisure activities and discretionary

spending likely to be hardest hit by a planned reduction in spends
Distribution of survey responses (%)
Change in spends in next six months Top losers
34% 21% 13% 9% 23% Vacation/leisure travel

29% 19% 18% 10% 24% Business travel Travel & transport
27% 21% 26% 8% 18% Public transport
24% 23% 23% 15% 16% Spas, theme parks, concerts
Out-of-home
21% 25% 23% 14% 17% Restaurants entertainment
23% 21% 24% 13% 19% Movies at cinema hall
25% 28% 20% 13% 14% Luxury brands/products
27% 19% 26% 12% 17% Cosmetics, makeup, perfume

Discretionary spends
24% 23% 24% 15% 15% Apparel/fashion
23% 19% 20% 16% 22% Tobacco & smoking supplies
33% 15% 19% 13% 20% Electronic durables/appliances Non-mobile electronics
29% 19% 23% 13% 16% Home construction/renovations
Home improvement
19% 27% 21% 15% 19% Home furnishings and décor
21% 23% 29% 14% 14% Scooters/bikes
Automobiles
34% 9% 35% 8% 15% Cars
A lot less Somewhat less About the same Somewhat more A lot more
Note: Question text: “How do you expect your spend to change in the next 6 months across the following areas?" For non- mobile consumer electronics categories and cars, Bottom 2 box
is a sum of those who have already cancelled their plans to purchase and those who plan to spend less among those who still plan to buy in next 6 months. Categories with Bottom 2 Box > 22
38% (5% less than average) classified as losing categories Excludes categories with N <~100. Source: BCG COVID-19 Consumer Sentiment Survey (India), March 23-26 2020 (N = 2,106)
% age of companies industry-wise to face liquidity crunch on revenue decline
Potential scenarios of Total # of 3-5% annual 7-9% annual 15-17% annual
liquidity crunch across top Companies Rev. decline Rev. decline Rev. decline
~1000 Indian companies Retail 20 45% 45% 55%

Forest Products & Packaging 31 32% 32% 52%
linked to revenue decline Consumer Non-durables 82 28% 35% 45%
from COVID-19 Fashion & Luxury 62 27% 35% 44%
Sectors which
may have high
Building Materials 39 impact from
26% 28% 38%
Methodology: Cash positions of the top liquidity crunch
~1000 public Indian companies (as per Auto & Components 60 22% 28% 37%
market cap) tested; Cash flow pressure Metals & Mining 63 24% 30% 37%
test on LTM Sep'19/ LTM Dec’ 19 financials, 20% 24% 35%
Chemicals 122
extrapolated to June '20 using multiple Sectors which
annual revenue decline situations (3-5%, 7- Consumer Durables 22 23% 23% 32%
may have
9%, 15-17%); Construction 42 19% 21% 31% moderate
Pharmaceuticals 65 12% 20% 31% impact from
Liquidity crunch: Final cash position (+ve or –ve) liquidity crunch

post mandatory obligations (fixed costs, interest Machinery 67 21% 21% 25%
expense, capex) including opening cash balance 18% 19% 24%
IT, Technology & Services1 112
Energy & Utilities 25 24% 24% 24%

Assumptions: Cost of Revenue declines with revenue; SGA,
R&D, D&A, Interest Expense, Other Operating Expenses, Media & Publishing 30 10% 13% 20% Sectors which
Capex, change in working capital remains constant and may have low
extrapolated pro rata basis; No dividend, debt repayments Travel & Tourism 24 13% 13% 17% impact from
assumed liquidity crunch
Exclusions: Banks, NBFCs, Insurance, Asset Management, Real Oil & Gas 17 12% 12% 12%
Estate, & co.s with latest published data prior to Sep '19;
Transportation & Logistics 21 10% 10% 10%
Aero&Defense, MedTech, Multibusiness, Telecom ignored as
sample size of co.s <8 Healthcare Services 12 0% 0% 8%
1.Education, HR, Security, Specialized Consumer Services,
Software Services, Communications Equipment, Electronics,
IT/IT Services, Tech Hardware
23
Source: S&P Capital IQ Financial Statements, BCG Analysis
Legend >35% companies facing crunch 25-35% companies facing crunch <25% companies facing crunch
~23% of total bank credit deployed to
industries/ services under full/partial
restrictions • Outstanding credit recovery
Sector-wise distribution of bank credit1 in India ($Bn2) reliant on financial health &
1,197 358 325 retrieval period for various
Industries & services
11% under full/partial
sectors
Services 27% 7% restriction ($280Bn)
constitutes ~23% of
47% 'total bank credit'
• Measures taken by RBI to
infuse liquidity in the
Industries 31%
economy

15%
82% Level of supply side – 3 months moratorium
restrictions
Retail 28% period declared on all the
38% Restricted3 credit payments
Agricuture Partially restricted4 – CRR requirements
Food credit 13%
1%
Not restricted5 reduced by 100 bps
Total Industries Services
1. Data as on 31 Jan 2020 2. Exchange rate $1=INR 75 3. Restricted: Industries with supply side restrictions; includes Travel & tourism,
Auto & components, Building materials, Construction/Infra, Real estate, Consumer durables& discretionary, Forest products &
packaging, Fashion & luxury 4. Partially restricted: Transportation & logistics, Metals & mining, Machinery, Chemicals, Technology &
software 5. Nor restricted: Energy & utilities, Oil & gas, Financials, Consumer staples 24
Source: RBI database; Media reports; BCG analysis
Speed of recovery for industries will
be dependent on multiple drivers Multiple drivers will impact speed to recovery
for industries post outbreak period
2008 recession: Industries witnessed different rates of recovery;
Can act as a starting pt. to evaluate post COVID-19 recovery Not Exhaustive
Demand side drivers

5 key distributions of select sectors as per intensity of impact & rate of recovery1
• Pent-up demand due to supply restrictions
• Seasonal/cyclical demand during Summer
Energy & Utilities period
Food & bev • Longer term shifts in consumer behavior due to
Pharma
social distancing, healthcare experience
Faster Apparel
Telecom services • Demand recovery of exports in global countries
Recovery Mining Retail
Real estate
Non metal minerals
Supply side drivers

Auto & Components Transport & logistics • Access to affordable capital, loans, insurance
Machinery Construction • Dependence on return of migrant labor, daily-
Petro-upstream Financials & Insurance IT/IT Services wage, casual labor
Metals
Slower Media • Availability of imported raw material, sourcing
Recovery Petro-downstream from other countries
Consumer electronics
Chemicals
Air Travel Other drivers
• Length of COVID-19 outbreak period,
persistence of subsequent waves; swift ramp-
Disproportionately In line Limited up in healthcare infra
higher impact with GDP impact • Magnitude and type of Government stimulus
package
1. Detailed backup in Appendix
Note: Recovery rates estimated by no. of quarters taken for the sectors to recover growth
• Monsoon intensity and time period
Source: Oxford Economics, BCG Analysis 25
Industries in China showing different speed of recovery (I/II)
Healthcare Consumer TMT2

>90% pharma companies 18% drop of retail goods sales, 43% drop >80% electronic component
resumed operation in late Mar (vs. of catering services, while 3% increase of manufacturers resumed operation
60% in Feb) online retail sales of physical goods in in mid March (vs. 70% in early
first two months of 2020 March)

~80% Medtech companies
resumed work in late Mar >80% smartphone supply chain
~90% of large retailing business1 has
resumed operation in late March
resumed in Mar
~95% pharmacies resumed work
in late March (vs. 90% in late Feb) ~5% cinemas reopened in late
5.6% increase of daily sales of 1,000
March
retail enterprises monitored by Ministry of
5-10% expected sales growth of Commerce (compared to mid-Feb), a
pharmacy chains in Q1 positive growth after consecutive
negative growth since late Jan
1. Incl. large agricultural product wholesale markets, large supermarkets, brand chain stores, e-commerce platforms
2. TMT – Technology, Media, Telecommunications 26
Industries in China showing different speed of recovery (II/II)
Automobile Real Estate Financial Institutions

90% OEM resumed production on ~18.2% increase of total residential 95% bank branches resumed work
Mar. 11th （vs. 84.4% on 2 Mar) housing sales area in 16 major cities by 22 Mar
during 15-21 Mar (vs. previous week)
>80% production capacity 800Bn RMB loan issued by

recovered in 11 of 13 major ~140% increase of total supply of real PBOC during Jan-Feb
suppliers by 9 Mar estate land of 40 large cities during 16-22
Mar (vs. previous week) 2.08% NPL rate (by end of Feb),
66.2% work resumption in only increased 0.06% from
dealers on 23 Mar ~84.4% increase of Evergrande's sales beginning of this year
due to the launch of online sales platform
YOY auto sales for Week 2 of Mar in Feb. (vs. 2019 Feb. ) 750Bn total amount of corporate
dropped 44%, climbing from bonds issued in Feb, more than
61% drop of Week 4 of Feb twice than last Feb
1. Week 4 of Feb, Week 1 of Mar and Week 2 of Mar 27

Emerging Macro-scenarios
28

Indian economy has shown resilience with past crises, through V
shaped recoveries GDP output at pre-crisis
levels (hypothetical)
Asian Financial Crisis Agricultural Crisis Global Financial Crisis Demonetization

(1997) (2002-03) (2007-08 crisis) (2016-17)
9100 12200 23,500 35000
8900 V shaped recovery V shaped recovery 22,500 V shaped recovery V shaped recovery
11700 34000
GDP in INR billion
GDP in INR billion
GDP in INR billion
GDP in INR billion

8700 21,500
20,500 33000
8500
Levels
11200
8300 19,500 32000
8100 10700 18,500
31000
7900 17,500
10200 16,500 30000
7700
7500 9700 15,500 29000

9% 14% 12% 10%
8% 9%
GDP Q-on-Q growth in %

12% 10%
7% 8%
10% 8% 7%
6%
Growth
8% 6%
5%
6% 5%
4% 6% 4%
3% 4%
4% 3%
2% 2%
2% 2%
1% 1%
0% 0% 0% 0%
1. GDP impact in 2007-08 was due to both the global financial crisis, as well as an NPA crisis due to aggressive lending during this period in anticipation of infrastructure growth 29
Source: Oxford Economics database
COVID-19's impact on GDP needs to be assessed on intensity &
geometry of shock
Macro-economic impact along 2 Intensity & geometry of COVID-19 to be assessed on level
dimensions of impact to each dimension
Disease & health impact Mild
Intensity (size of shock)

V U L
Severity of the disease &
effectiveness of healthcare
Disease Moderate
systems intensity
V U L
Financial & economic impact

Impact on the liquidity &
V U L
Severe
capital robustness of Impact on
liquidity &
financial systems & the real Trend growth Trend growth
confidence unaffected downgraded
economy, leading to long
term economic impact Geometry (shape of shock)
Capital, labour &
Disease duration productivity
deterioration
Source: BCG Center for Macroeconomics analysis 30
Intensity and Geometry of major previous
shocks for India
Real GDP Q-on-Q
growth rate reduction1
Learnings from
(~0%) V U L previous economy
Intensity of shock
Demonetization
(2016)
shocks & recovery
(~4%)
V Agricultural crisis
(2002-03) U L paths for countries
like China will help

Asian Financial
crisis (1997)
determine
(>10%)
V
Trend growth
Global financial
crisis (2008-09) U L
Trend growth
potential impact
unaffected downgraded
Geometry of shock (V-U-L)

1. Growth rate reduction taken on Q-on-Q India GDP growth, from the peak before crisis to Previous shocks
the lowest point during the crisis
Source: NBER, BEA, BCG Center for Macroeconomics analysis
to economy 31
Data as of 27 Mar
For USA, emerging views on COVID-19 indicates a GDP drawdown

greater than 2008 Illustrative
Expected impact of COVID-19 for USA

Current view of
Real GDP COVID-19 impact
Drawdown1
• US H1 '20 drawdown1 likely larger than
9/11 recession in '08
(~0%) V U L
Intensity of shock
(2001)
Early 1990s • Shape not yet fixed – could be V or U

(~2.5%) V recession
U L shape

(1991)
Global financial
crisis (2008-09) • U-shape triggered if shock to labor,
V U L
capital, and productivity growth is
(>6%) large enough
Trend growth Trend growth
unaffected downgraded
• Recession likely
Geometry of shock (V-U-L)
1. Real GDP drawdown refers to decline in real output during the crisis relative to prior peak, this has been used to calculate impact for USA GDP
Source: NBER, BEA, BCG Center for Macroeconomics analysis 32
Key indicators to look out for as COVID-19 scenario develops in India
Intensity of impact Geometry of impact
Disease & health impact Financial & economic impact Disease & health impact Financial & economic impact
1 Virus properties 4 Financial system liquidity 1 Time to cure / vaccine 3 Financial system capital shock
• Transmissibility of • Repo market stress • Vaccine development • Capital adequacy ratio
disease • Commercial paper timeline • Volume of loan delinquencies
• Mortality rate market stress • Regulatory approval (bad loans, delayed payments)
• Bank liquidity ratios time expected
2 Mitigation policies (indicates fiscal policy 4 Real economy capital &
• Testing levels during adequacy) 2 Disease seasonality & productivity shock
early period of epidemic immunity • Investments in equity & debt
• Mitigation / suppression 5 Real economy liquidity & • Disease severity with • Index of industrial production

policies implemented confidence levels season changes / higher (IIP)
• Strictness of • Volume of bank temperature • Household & firm bankruptcy
enforcement borrowings by firms & • Time to immunity
households (indicates 5 Impact on Global economy
3 Healthcare system customer discretionary • Impact of COVID-19 mitigation
effectiveness spending) measures by other countries
• Utilization (capacity) of • Changes in travel (eg. Lockdown duration)
healthcare system frequency • Impact of GDP & economic
• Possibility/speed of • Unemployment rates indicators of early affected
adding health capacity • Stock market / volatility countries
indexes
33
Source: Government reports, Press search, BCG analysis
But the reality is
unknown …

… and we need to plan for
all eventualities
34
BCG's approach to handling impact of COVID-19
Now: Tackle Near-term: Prepare for the rebound, Seek Medium-term: Plan for the
immediate priorities advantage in adversity new reality post crisis
Max 2-3 weeks1 3-6 months1 Beyond 3-6 months1
Mobilize "war room" Fortify Reinforce Seize Reinvent self: 'Win in the new
liquidity & supply demand reality'
Protect employees and customers, profitability recovery
Re-establish

control the narrative Re-define purpose, act to win
Manage cash; availability, Protect customer
Rationalize costs for strengthen supply base; maintain or
resilience; explore network grow wallet share Reimagine business possibilities
Ensure business M&A moves Identify behavior shifts - Adapt offerings
continuity & fulfilment models; Accelerate digital
Stop gap measures as necessary Re-strategize FY20-21 Capture new white spaces;
(e.g. sourcing, mfg., distribution) Consider inorganic moves
Build agile scenario-based plans; re-configure workforce
to deal with uncertainty …and more
Establish visibility
Restructure: Build resilience
Setup a digital control tower, Accelerate digital transformation
track critical KPIs, monitor Protect against future shocks; Build 'firm of
disruptions Sales, service & fulfilment; Ways of working
the future'; Scale new ways of working
1. Timelines indicative: Linked to stage of crisis in each market and level of impact on each industry 35
Engage as a partner
We will partner with you in getting the rapid response team kick-
started with an agile working model
Plan for the unknown

We will drive a scenario wise assessment of company's exposure &
How can BCG outline mitigation roadmap
help you? Support on immediate priorities

We will work with you to deep-dive on critical priorities to layout a
detailed action plan

Capitalize on emerging opportunities
We will work with you to scan for emerging new opportunities
(M&A, diversification) to enable acting early
Bringing best-practices to you

We will bring in the latest learnings and best-practices from around
the world
36
We can hit the ground running to achieve rapid impact
Proven suite of tools to implement from Day 1
Checklists, bench- Up-to-date research Robust framework to Cash office setup, Day-to-day global
marks, remote best & insights on re-strategize for Cash management demand signals

practices, industry- consumer sentiment FY20-21, modeled at framework, 100+ across CPG, T&T, F&L
specific views, … w.r.t COVID-19 disease, economy, proven levers to scale Retail, and others
industry & company and sustain results
levels
Agile Strategic Liquidity & cash
E2E crisis COVID-19 Cons.
Response & management Demand Sentinel
management sentiment
Scenario Planning framework
37
The situation surrounding COVID-19 is dynamic and rapidly evolving, on a daily basis. Although we have taken great care
prior to producing this presentation, it represents BCG’s view at a particular point in time. This presentation is not
intended to: (i) constitute medical or safety advice, nor be a substitute for the same; nor (ii) be seen as a formal
endorsement or recommendation of a particular response. As such you are advised to make your own assessment as to
the appropriate course of action to take, using this presentation as guidance. Please carefully consider local laws and
guidance in your area, particularly the most recent advice issued by your local (and national) health authorities, before
making any decision.

38
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(a copy of which is available upon request) or such other agreement as may have been previously executed by BCG.
BCG does not provide legal, accounting, or tax advice. The Client is responsible for obtaining independent advice
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to update these materials after the date hereof, notwithstanding that such information may become outdated
or inaccurate.
The materials contained in this presentation are designed for the sole use by the board of directors or senior
management of the Client and solely for the limited purposes described in the presentation. The materials shall not be
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COVID-19

India Perspective 2.0

• Short-term trajectory of outbreak across countries depends largely on what isolation

Copyright © 2020 by Boston Consulting Group. All rights reserved.

(II/II) • Speed to recovery for industries dependent on multiple drivers

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COVID-19: 781k cases confirmed across 178 countries

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Countries are being impacted differently across the globe in terms

India Reported cases doubling every 3 days

15 Brazil Rest of the world Spain

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Cumulative #of confirmed cases

Countries with low testing rates tend to report fewer cases

Spain Switzerland Italy

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Major countries have recently made strong interventions to enforce

Non-essential International Domestic Non-essential

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Countries following similar exponential growth path until major

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South Korea managed to contain

Global equity markets have aggressively priced risks following

Inflection with virus' spread to

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Stimulus package announced by US

Global & Indian indices fell by ~35% in 6 weeks (till 23 Mar),

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Traded area of buildings in top 30 cities

Sum of daily Metro passenger in 8

Daily coal consumption (10k tons)

cities (10k person)

in late Mar/early 45 40 2,520

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No. of COVID-19 cases in India have been on the rise

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India announced total lockdown for 3 weeks entailing strict orders

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~$180Bn annual imports & exports linked to high exposure countries

USA 161,807 19.7% 34.9 (7.2%) 54.0 (16.8%)

Iran 41,495 9.0% 4.4 (0.9%) 4.6 (1.3%)

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South Korea 9,661 1.1% 16.1 (3.3%) 4.8 (1.4%)

Others 62,113 12.5% 202.4 (41.9%) 152.4 (47.3%)

Major imports Major exports

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Total 23% 38% 14% 25% 496

Agriculture 1% 48% 25% 26% 217

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Industries are seeing varied impact in short-term amidst restrictions

Impact of Downside Downside Downside Limited Upsides

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Consumer sentiment survey: Essentials, savings, health & wellness, at-home

10% 11% 33% 21% 25% Utilities

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Consumer sentiment survey: Travel, outdoor leisure activities and discretionary

34% 21% 13% 9% 23% Vacation/leisure travel

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~1000 Indian companies Retail 20 45% 45% 55%