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MOSL: Morning India (26/March/20): 1. EcoScope (Gauging economic impact of COVID-19); 2. Strategy (Taking stock of correction: Assessing the price-valuation damage in Nifty); 3. Expert Speak (a. Healthcare; b.

MOrning India (26/March/20):  1. EcoScope (Gauging economic impact of COVID-19); 2. Strategy (Taking stock of correction: Assessing the price-valuation damage in Nifty); 3. Expert Speak (a. Healthcare; b. Cement)

 Today’s top research idea

EcoScope: Gauging economic impact of COVID-19

• The adverse effects of COVID-19 on several sectors are already visible as most companies have shut their plants and wherever possible are allowing employees to work from home. Our calculations suggest that only 30-40% of the economy is currently operational at different intensities.
• A sensitivity analysis of the adverse impact of lockdown suggests that a single day of complete lockdown could shave off 14-19bp/55-75bp from annual/quarterly growth.
• It implies that with 7 days of complete lockdown and 8 days of partial lockdown, real GDP could decline ~3% YoY in 4QFY20. With 14 days of complete lockdown in Apr'20 (assuming things normalize from mid-May'20), GDP could decline 12.2% YoY in 1QFY21, first ever de-growth since the quarterly data became available since late1990s.

With two consecutive quarters of GDP decline, India could see its first recession since 1990s.

Piping hot news

White House, Senators strike deal on $2-trillion stimulus package

The Trump administration struck a deal with Senate Democrats and Republicans on an historic rescue package with more than $2 trillion in spending and tax breaks to bolster the hobbled US economy and fund a nationwide effort to stem the coronavirus. “At last we have a deal,” Senate Majority Leader Mitch McConnell said early Wednesday on the chamber's floor. “I’m thrilled that we’re finally going to deliver to the country.”