India could be favoured by FPIs if it manages to limit virus impact: CLSA

Mumbai: The Covid-19 outbreak in India is at a critical juncture as in countries where the number of confirmed cases of the virus crosses the 100-mark, there tends to be an exponential growth in confirmed cases after crossing that level, said CLSA.

The brokerage said the Indian government has taken actions to restrict social contact much before comparable measures were taken in countries which have more than 1,000 Covid-19 cases.

However, the next two weeks will be key to assess whether these steps have been enough to limit the spread in India, the brokerage said. India could be favoured by FPIs in their portfolios if it manages to limit the impact of coronavirus, said CLSA.


Meanwhile, an extended period and more severe restrictions on social contact could have a material impact on income of small businesses and individuals in unorganised sectors, according to the brokerage.

Consumption demand could get hit as a result, said CLSA. Besides that, there will be companies, mainly startups, where necessary regular funding from foreign investors may become difficult, which could force a shift in profitability from growth for some period and this may drive some job losses in these areas, said CLSA.

IT services firms may also hire less as extended impact of Covid-19 could hurt global demand and lead to workforce rationalisations, the brokerage said.