By Aditya Raghunath
Investing.com — Brokerage firm Jefferies said that the second wave of COVID-19 and the resultant lockdowns are likely to impact the retail sector more than FMCG (fast-moving consumer goods) companies.
Retailers will face challenges thanks to supply-side issues while FMCG companies might get by through e-commerce. “Giving learnings from last year and essential shops continuing, the impact on FMCG should be somewhat limited,” said Jefferies.
If other states follow Maharashtra’s move, the firm said that retailers like Titan Company Ltd (NS:) and Trent Ltd (NS:) could see serious issues. It added that D-Mart has discontinued sales of high-margin general merchandise which is a concern.
Maharashtra contributed around 35% of Avenue Supermarts Ltd (NS:) (D-Mart) store count and up to 15% for other retailers. D-Mart shares closed April 8 at Rs 2,936.5, down over 10% from its March 5 close of Rs 3,286.1.
Trent has lost over 21% from its March 4 closing of Rs 927.05 and closed at Rs 729.05 on April 8. Aditya Birla Fashion and Retail Ltd (NS:) closed at Rs 189.7, down 15% from its March 8 closing of Rs 220.85. Titan, however, closed at Rs 1,571 .3 on April 8, near its year-to-date high. .
India reported over 1.31 lakh of COVID cases on Thursday, April 8, the highest ever since the pandemic began last year.