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Live Post: What Listed Companies Are Saying About The Demonetization Impact



We record what companies have said about the impact of the demonetization (announced on 8-Nov) of Rs. 500/1000 notes to their business. This is a live post – more reactions will come as we see them

Here are the comments we captured on 12-Dec. For previous coverage, please scroll down.
Today we cover a few more companies from Industries such as Apparel Manufacturing, Beverages – Wineries & Distilleries, Credit Services, Department Stores and more.


Credit Services: Bajaj Finance
In its latest Investor Presentation shared the Effects of Demonetization:

  • Impact on CIBIL inquiry

    • Inquiries dropped drastically post the announcement public & private sectors banks being more pronounced.
    • While online traffic has increased, they have not come up to pre-announcement levels
    • Credit Card & Auto Loan inquiry volumes have increased beyond pre-announcement volumes
    • Other trade types continue to lag behind
  • Impact on deployments – Logins

    • 2W & 3W finance – Very slow demand post demonetization. 2W & 3W finance business has seen significant deterioration in current bucket portfolio owing to high dependency
      on cash collections.
    • Consumer durable finance – Have cut 18% business in Q3 FY17 as articulated in Q2 earnings call
    • Digital product finance – Have cut 35% business in Q3 FY17 as articulated in Q2 earnings call
    • Lifestyle product finance – Deep slow down in first 30 days
  • Impact on deployments – Disbursal

Latest Investor Presentation shared the Effects of Demonetization:


Real Estate – General: DLF
In its latest Investor Presentation shared the Effects of Demonetization:
DevCo: In the longer term, we believe that the demonetization shall be a positive for both the Company and all its stakeholders especially customers.


Beverages – Wineries & Distilleries: Pincon Spirit
In its latest Investor Presentation shared the Effects of Demonetization:

  • Reduced value – From adequate currency into handful legal tender
  • Increased anxiety – Consumer sentiment affected, moderating spending
  • Enhanced stress – Limited resources to manage household and business operations
  • The common perception: reduced discretionary spending

Demonetization Plus: Rs. 100 (continuing legal tender) currency largely used for our products. Most Pincon customers enjoy adequate volumes of Rs. 100 currency note.
Rubber & Plastics: Finolex Industries
In its latest Investor Presentation shared the Effects of Demonetization:

  • Future Outlook: Though demonetization has created a temporary setback, the long term impact will be positive
  • Demonetization is likely to reduce the gap in primary and secondary market transactions.


Department Stores: Future Retail
In its latest Investor Presentation shared the Effects of Demonetization:

  • In order to support the liquidity, each of our Biz Bazaar POS were deployed to releasenew currency notes in a quick time frame
  • As an outcome of Demonetization, the share of modern retail trade increased substantially and we believe going forward, this event shall contribute favorably
  • Typically, card/wallet invoices are of higher value than the cash invoices, this might potentially increasing the overall sales value in future


Houseware: Borosil Glass Work
Mr. Shreevar Kheruka – Managing Director & Chief Executive Officer said:

  • In the short run we will have some impacts on the sales of products from a secondary and tertiary perspective. Eventually this is going to hit us on the primary sales also; however we do have furnace repair sometime in April-May of the coming year, so we are planning to run at full capacity because anyway we have to build stock for selling during the 2 months or so that the furnace is out of production. So we continue on full capacity and hope we are able to come up with ways to limit the impact of demonetization on sales of the organization.
  • With demonetization we do not know how real estate prices are going to move in terms of the valuation.

Here are the comments we captured on 6-Dec. For previous coverage, please scroll down.
Today we cover a few more companies from other varied Industries such as Apparel Manufacturing, Beverages – Wineries & Distilleries, Drug Manufacturers – Major, Household & Personal Products, Packaged Foods, and more.


Household & Personal Products: Dabur India
A.K. Jain – VP Finance said in a press release:

Demonetization of high currency note initiated by the government on 8th November, 2916 is a positive move for the economy and industry and will lead to better transparency and compliance in the medium to long run. This will be beneficial for organized FMCG players creating a level playing field. However, on account of scarcity of cash available with customers and traders, we foresee some near term pressures on the company’s business. The impact varies across channels and geographies, and stress is highest for wholesalers and small town grocery shops who are facing a severe liquidity crisis and are destocking.
The impact is likely to be positive on modern trade outlets and plastic money enabled retailers who are likely to benefit from this change. On account of continuity of current uncertain situation it is difficult to quantify the impact for Q3 FY16-17 at this point of time, however it is temporary in nature and situation will improve with increase in availability of new currency. In the meanwhile, we are focusing more on modern retail, e-commerce and institutional sales and also encouraging our general trade (GT) retailers to adopt cashless payment systems. This will help in mitigating the overall impact of demonetization and pave the way for normalization in the next few months.

Credit Services: Ujjivan Financial Services
In a press release:

  • Recorded robust collection rate of 91% in November 2016, even when the cash dominated microfinance sector was reeling under the stress of demonetization.
  • Ujjivan disbursed loans worth Rs 553 crore in November out of which 65% was in cash and
    35% was cashless.


Apparel Manufacturing: Indian Terrain Fashions
In a presentation submitted:

  • Recent demonetisation scheme is expected to impact business in short term more in
    particular on the Wholesale business and to a limited extent to Modern Retailing.


Real Estate – General: Peninsula Land
In a concall with Investors:

  • Impact of demonetization definitely would be felt across industry players
  • Impact on the micro markets and the players within that would be different from place to place


IDFC Paper on Demonetization


Drug Manufacturers – Major: Piramal Enterprises
Vijay Shah – Executive Director, Piramal Enterprises said:

  • Demonetisation is indeed a black swan event
  • Extremely difficult to predict the future

Khushru Jijina – Managing Director, Piramal Fund Management added:

  • Consolidation happening in real estate sector
  • If one ignores the sentiment for the short-term which is three months to six months, our house view is that obviously, these people (Tier-1 developers) are going to thrive as they always deal in cheque and not in cash
  • Indore, Jaipur, Ahmedabad are the regions where the cash element is pretty high and sales their are going to be affected
  • Developers who are in the parlance were using unauthorized construction means their entire project is cash, are going to be in severe trouble
  • Tier-II cities will see prices coming down and under pressure
  • RERA clubbed with demonetization is accelerating the death of the non-organized sector
  • Tier-II cities where we do not operate at all, I do see prices coming under pressure
  • Definitely do not see prices crashing because the margins have been reduced in the last few years
  • Approvals will get affected in the short-term. Long term approvals would continue. Because at the end of the day you cannot have a system where the approvals are not given at all, it has to, it will get escalated at some point or the other.
  • Wide expectation of taxes coming down in the budget
  • Lodha is our client who does Rs. 200 crores per week, have just finished last two weeks of Rs. 100 crores each so, it is no mayhem as people think, the mayhem is in Tier-II please.

Real Estate: Arihant Superstructures
Mr. Ashok Chhajer — Chairman and Managing Director, Arihant Superstructures said:

  • De-monetization will completely remove the cash component which was involved in the
    high value transaction properties and that was what was existing more in two tier cities as well as properties around Metros
  • No impact on the service class and the middle-income group people
  • De-monetization will help the real estate industry to groom up and to come in a format where it would be more easily understandable to people and the myth about that each and every transaction has and had a lot of cash component would be eliminated to a larger extent
  • After effects of de-monetization undoubtedly would be that land prices will have to drop down
  • Temporary inconvenience to the public which is happening there would be lay back for one and half month – two months. So, we see no more large price reduction would happen – a bit of correction, may be to an extent of 2% to 5% depending upon the prices and its location and the competition
  • The enquiries from the customer’s side have completely dropped down to zero as our call centers also are not ringing
  • De-monetization has led to temporary parking of money in real estate which would stop post January 1st – luxury segment


Beverages – Wineries & Distilleries: Globus Spirits
Mr. Ajay Kumar Swarup – Managing Director; Mr. Shekhar Swarup – Executive Director; Dr. Bhaskar Roy – Executive Director & COO and Mr. Ajay Goyal – CFO in a concall:

  • In the near term we anticipate slowdown in demand owing to the liquidity crises faced by the end consumer due to demonetization of old currency notes
  • On the consumption side, demonetization has not had too much of an impact right now
  • There has been initial few days of concern but considering the fact that IMIL is quite a low priced product and I do not think our consumers are using the old high denomination notes to pay for our products
  • This is the time of year when the consumption is picking up. So in fact, if you look at the data, there is not a decline in consumption in the last few days
  • High consumption period is yet to come and we will see that towards the end of
    November and possibly full December and January
  • Spoken to a few dealers yesterday also, they are saying that the supply is going on and they somehow anticipate that there will not be much problem
  • There is no problem in raw material, there has been no impact on raw material, there has been no impact on transportation of products.

Credit Services: L&T Financial Holdings
Presentation submitted to the exchange.


Real Estate – General: The Phoenix Mills
Mr. Shishir Shrivastava – Joint Managing Director and Mr. Pradumna Kanodia – Director – Finance said:

  • Noticed a reduction in the footfalls at the mall on Wednesday (9-Nov) and Thursday (10-Nov)
  • Over the weekend we have seen full recovery
  • Food and beverage across the malls saw good consumption, during the weekend that was visible with all restaurants showing high occupancy.
  • The consumption data is yet to flow in, so it will take at least a couple of weeks to collect that information.
  • Cash transactions account to anywhere between 20% to 25% of the total sales at
    our malls
  • Hypermarkets are performing slightly better after the demonetization
  • Too early to envisage impact on residential market

Here are the comments we captured on 30-Nov. For previous coverage, please scroll down.


Building Materials: Ultra Tech Cement in their presentation

  • FY17 GDP may shrink due to recent demonetization step taken by Government
  • Post demonetization interest rate and inflation likely to fall further
  • Demonetisation will have a negative impact on cement industry
  • Sector Guidance – Short term impact on demand due to demonetization, though Industry expected to grow 7-8% in long-term


Auto Manufacturers: Daimler

  • Daimler has gone in for block leave (no production days) for three days last week
  • Planned a similar exercise this week
  • Production always follows anticipated market development, which we are currently observing with special scrutiny

Food & Beverages: Industry Views

  • Estimate that sales have fallen by 50% in the wake of less spending by consumers for a number of FMCG products, including juices, snacks, sauces, bakery items, chocolates, etc.
  • Too early to assess the situation
  • Temporarily it has impacted the operations as demand has gone down by half
  • We hope this would be temporary and the situation would ease by January
  • The effect on packaged foods will be seen clearly in the end of next month
  • The last 15 days will put us all to the test in which case the industry works on credit or goes cashless
  • Processed food manufacturers are storing the products as ample quantity of it is produced, but the consumption rate is low


Credit Services: Bharat Financial Inclusion in their presentation

  • Collection Efficiency Of 97% With A Lag Of 2 Weeks
  • Disbursements – Rs. 173 crore during 14-Nov to 18-Nov and Rs. 253 crore during 21-Nov to 25-Nov
  • 15% Cap on disbursements portfolio outstanding for each state (20% for Karnataka and
  • Odisha, Karnataka and Maharashtra exposure are at 60%, 49% and 44% respectively the net worth.
  • Immediate Plan until 31-Dec -> 90-100% Cash Disbursements + POS Growth
  • Short Term Plan -> 90% Cash Disbursements + 10% Bank Account DIsbursements + POS Growth
  • Long Term Plan -> 20% Cash Disbursements + 90% Bank Account DIsbursements + POS Growth


Electronics Distribution: Shilpi Cable
Manish Bhatt, CEO said:

  • B2B – the impact of their sales which will impact their performances is yet not dawning on them.
  • B2C – activities have come down to 20%-30% of what used to be at the retail outlet

Ajay Mahajan, CFO added:

  • Demonetization impact on receivables – drop of almost 30% to 35% collection
  • Hope this is a temporary effect and maybe from the next quarter everything will be in line


Credit Services: Satin Creditcare
Mr. H.P. Singh, Chairman and Managing Director said

  • We are able to service debt for the next 6 months
  • Getting more debt into the company – closed 3 debt deals in the last 2-3 days
  • No collections from 8th – 13th November. From 14th November, overall collection record at about 55%
  • Collection issues are present in UP but only in certain pockets. Of the Rs. 4,000 crore loan book, UP accounts for 33% exposure.
  • Pilots for cashless disbursements and disbursements into account
  • Trying to curtail costs
  • Short term blips but overall fundamentals remain intact in the long term
  • Market is going to shrink to a certain level
  • Currency has reached Bihar and MP where we see a growth in collections pickup. Rajasthan and UP still have long queues.
  • Elections now technically have gone to a background in terms of their impact
  • Banks have still not reached  a lot of places – so that is a very big problem
  • Guidance given last quarter will not hold true.
  • Loan installments are small. In the range of Rs. 800 to Rs. 1,400
  • Delays in collection and we will do our best to make sure it does not go into NPA
  • Ours is a very small problem – maybe a truck operator or SME which has taken loan of over 10 lakhs or so will be affected far more than us


Farm & Construction Equipment: Escorts in their presentation
The demonetization of ₹500 and ₹1000 banknotes step taken by the Government of India, positive move for long term growth and development.


Specialty Finance: PNB Housing Finance
Mr. Sanjay Gupta, Managing Director said:

  • Impact of demonetization on the growth of individual housings? – too early to give a guidance
  • There might be a temporary dip of one or two months but we do not envisage a long-term negative impact
  • This is a golden opportunity that the informal sector also comes into the formal sector to take housing loans and LAP loans from the formal sector and increase the penetration of mortgage to

Mr. Ajay Gupta, Chief Risk Officer added:

  • Direct impact of demonetization could only be on liquidity and not on viability or solvency of the business
  • Small dip in the business volume in a short term
  • Loan to Value – even if there is a fall in price which may be temporary in nature, it will not adversely impact portfolio quality
  • There may be increase in bouncing, delinquencies for a very short period

Mr. Shaji Varghese, Business Head added:

  • In the long run, this may help to expand the market.
  • In the short term, there is a likely chance for postponing the decision to buy the property.


Auto Parts: Suprajeet Engineering
Mr. Ajith Kumar Rai, Chairman and Managing Director said:

  • So far no 2 Wheeler manufacturer customer has revised production schedules
  • Not significant but some effect in the replacement segment
  • Larger effect in the aftermarket – spares market

Integrated Shipping & Logistics: Container Corporation of India
Mr. V. Kalyana Rama – Chairman and Managing Director said:

  • Expecting some growth onto rail
  • May get into some problem in logistics, the first mile and last mile
  • Nothing really considered alarming at our terminals (trucks movements)

Industrials: S H Kelkar
Mr. Kedar Vaze – Whole Time Director and CEO said

  • We will have a much clearer picture towards the end of December as to what is the effect on the business in the short-term
  • Long-term this is a great shot in the arm for companies like ourselves who are organized and have a national presence
  • Impact of demonetization on our business will be very small
  • Bigger companies will face some of the demand erosion
  • The business will come to the middle, the mid-sized retail companies will continue to grow, very small ones will have a very difficult environment, the big ones will see some decline in their product offering because of the liquidity being affected.


Auto Manufacturers: Atul Auto
Mr. Jitendra Adhia – President Finance said

  • Premature to confirm how it is going to impact the business. Once this first phase is over then we will have some more clarity about the issue
  • Sales are largely dependent on retail finance availability

Building Materials: IFGL Refractories
Mr. Kamal Sarda, CEO said:

  • Too early to say since it’s been only 6 days
  • It will impact smaller or mini steel mills or ultra steel mills whose business model could be dependent on taking their benefit of excise and sales tax by going through the unorthodox way of selling
  • We also have to look at consumption size – whether the consumption size has got enough money to consume in the same quantity or not.
  • Impact on real estate will be watched over the next 3-6 months

Business Services: ICRA

  • Too early to assess the impact of de-monetisation but NBFC’s (financing commercial vehicles), logistics, CV manufacturers might get impacted in near term.


  • Cash collections of commercial vehicle financiers has dwindled over last 10 days. Some leading NBFC’s have 30-60% of cash collection. Small fleet operators and LCV owners usually pay in terms of cash.
  • Cash crunch might ease, but it might be followed by slowdown and in turn might impact viability of fleet operators and loan servicing. Delinquency levels may go up in near term.


  • Impact on operators more in Tier II/III than in metros. Demand for trucks has fallen by 15-30%, owing to high reliance on cash for the daily operations.
  • Small fleet operators/Single LCV owners are most hit. Unavailability of cash to meet trip expenses has pushed this sector to edge.
  • Organized fleet operators are least hit, due to their cashless system, except for certain expenses which cannot be met by online payment

Commercial Vehicle Sales:

  • Demonetisation might reduce commercial vehicle  sales. Fleet owners might no go for vehicle addition or replacement owing to liquidity crunch. 90% of the CV sales in India rely on external financing.
  • Weak industrial activity, uncertainty of impact of GST have been the major factors for declining trend in commercial vehicles (especially heavy commercial vehicles) sales. The trend might have reversed from April 2017 due to application of BS-IV emission and end of the fiscal year.
  • Inventory levels stands at 4-6 weeks, which might increase in coming weeks. OEMs would continue to dispatch vehicles already produced, but realign inventory based on future demand.
  • Growth forecast revised for M&HCV from 12-13% earlier to 5-8%. In Sept 2016. LCV’s also might see a decline in sales.
  • Bus segment is least impacted due to higher sales to institutional clients. Typically orders are placed 6-12 months in advance.

Chemicals: Godrej Industries
Adi Godrej – Chairman said

  • We welcome the recent demonetization step
  • Too early to tell the effect of the demonetization

Real Estate Services: Brigade Enterprises
Mr. M.R. Jaishankar – Chairman and Managing Director said

  • Brigade is also one of the participant in the fraternity so we cannot escape from any negative news on this.
  • Price correction may happen for finished inventory of any unorganized market
  • True impact of demonetization after 31-Dec
  • Banks will be flush with funds which will lead to drop in interest rates in which case it will have a positive impact on every industry including real estate industry


Luxury Goods: Tribhovandas Bhimji Zaveri
Mr. Saurav Banerjee, CFO said

  • Manner in which a jewellery is purchased will be far more disciplined.
  • Hallmarking, Excise duty, the GST which is round the corner, demonetization and whatever else is happening, all these measures will actually make the brand stronger


Consumer Electronics: Bajaj Electricals
Mr. Shekhar Bajaj, Chairman and Managing Director said

  • More fear in those people dealing with cash. Therefore likelihood of more people coming in the official channel is likely to go up. This means dealers who were not dealing with us before since they wanted to deal without any bill, will be ready to buy from us . We call this FMCG model for consumer durable industry.
  • People depending on no bill type of people will lose out
  • Introduced channel financing to all dealers which will increase substantially over the next 3-6 months.
  • No impact on consumer products business. Cash flow is made a little difficult for short term.
  • We are not a luxury item which customers are going to worry about
  • Might impact smaller markets where banking is very far in rural areas
  • This demonetization is an issue with the illegitimate money keepers and so we don’t have to worry at all

Here are the comments we captured the first time


Household & Personal Products: Hindustan Unilever
In a Presentation yesterday HUL says it is a long term win-win. But short term pain exists: wholesale trade hurt due to liquidity squeeze, long distance logistics impacted, advertising impact too. (“Few months”).


Credit Services: Cholamandalam Finance & Investment
Vehicle Finance forms 68% of the portfolio with a 50:50 cash to non-cash collection. While the current mode of non-cash collection will be continued, the cash collection process would undergo a change. For the short term future, cash will continue to be collected from the customers and deposited in their accounts supported by authorization letters along with assisting customer deposit cash and then customer issuing DD/ Cheque against their loan accounts. For the long term the company will implement use of modern tech in the form of POS machines and swipe in debit cards. Impact on cash collections would continue to Q3 and Q4. On Home Equity/ Loans, Cash collection forms just 2% of the collection and hence the company does not see any major impact on collection or on security valuation.
Disbursements – 68% cash for Vehicle Finance and 32% for Home Finance will see short term impact as the long term strategy remains on digitization of funding. Drop in Home Sales, Impact in funding the margin money etc. are some of the pain points the company will continue to witness until the end of the financial year.


Real Estate – General: Nila Infrastructure
No impact on business there is no cash payment to contractors and subcontractors. However, they in turn would be paying people in cash. Initial hit coming from labours. Don’t see any immediate effect of demonetization. Our Order book contains projects which have already been sold by the government to the beneficiaries. Expect reduction in interest cost and input cost. Foresee improvement on the EBITDA levels.


Credit Services: Ujjivan Financial Services
Mr. Samit Ghosh – Managing Director and CEO said:

  • Postponed collection for the first three days during demonetization
  • Collections resumed from 14-Nov
  • Avg. Collection at Pan India level stood at 61% (9th Nov  – 19th Nov)
  • Provided 7-10 days extension for women towards loan repayments
  • Disbursed Rs. 170 crores (9th Nov  – 19th Nov). Cash disbursements is about 60%
  • Expect situation will ease by end of December
  • Do not see a significant danger for MFIs
  • No issues on obligations – good in terms of liquidity to meet all commitments till December
    and beyond (Rs. 540 crores sanction from NABARD and Rs. 300 crores sanction from SIDBI)
  • Repayment efficiency – New Delhi and Uttar Pradesh (35% to 40%) have lower rates than the national average. States in the West are doing quite well including Goa, Gujarat and Maharashtra. AUM contribution from 4 states (Karnataka, West Bengal, Tamil Nadu and
    Maharashtra) is close to 56%
  • Don’t expect collections to be suspended considering UP is up for elections within the next three months
  • People are not able to access money in the big cities. While people in big cities have to stand up to 12 plus hours to get the money, in the semi urban areas maximum waiting period is approximately 3 hours.
  • Do not see a serious adverse situation unless the situation prolongs which then could be a problem
  • Do not see the MFI customer base actually becoming much worse than anyone else.
  • We are not collecting the old notes, we are not deloused with the old notes and if we have collected the old notes, all we could have done it is to return it to the bank. We are only getting in legal tender which we can recycle immediately.
  • Do not think chit funds will get affected by this


Auto Manufacturers: VECV – Volvo Eicher Commercial Vehicle
In an interview with CNBC TV18, Vinod Aggarwal, CEO-VE Commercial Vehicles, Eicher Motors said: A good move that will help curb the parallel economy. However in the short term there will be tremendous pain. Transportation severe has felt the severe impact of this. Drivers are used to meeting all route expenses in cash. Delhi to Bangalore trip which takes 8-10 days required 20-25k in cash. In the absence of this cash, there has been a severe impact on transportation of goods while at the same time transporters face a difficulty in managing day to day operations. Impact on sales of new trucks will be short term in nature.
Difficult to give a drop in sales of trucks which can be determined only by month end. Dealer information on the foot falls last week has been very minimal as  buyers are currently focussed on managing their day to day operations and are not concentrating on purchasing new vehicles.
Majority of the sales happen during the last week of the month. Dealers are not able to convert customers into sales (of orders booked last month).  DIfficult to access current impact which will be identified only by month end.
Auto Dealerships: Hero MotoCorp, Honda, Royal Enfield, TVS Motors

  • Jasodha Auto – authorised dealership of Hero MotoCorp – We used to sell 20 vehicles per day earlier, and since the demonetisation move, sales have fallen to 2-3 units per day. The footfalls for enquiry have also drastically dropped.
  • Representative of a Honda Motorcycle dealership – It may be a good move in the long term, but for now sales have stopped. Close to 95% of our customers pay by cash, and only a handful use other means such as credit cards. With only Rs 2,400 in their hand, it is not surprising that they aren’t buying two-wheelers.
  • Representative of a TVS Motor dealership – Managed to sell only one vehicle in the first two days after demonetisation came into effect. Average daily volume was around 8-10 units per day before the government’s latest move to fight black money. After sales works such as repairs and servicing – decline is nearly 60%.
  • Aman Automobiles – authorised dealership of Royal Enfield – We have seen a drop in sales volumes, yes, but the number hasn’t been drastic. Against daily sales of around 3-4 units, the number has fallen to roughly 2-3 units a day.
  • Representative of a Harley-Davidson dealership – Sales have fallen to almost nothing over the past week. This month has been the worst in the year so far. The few customers that did turn up, brought with them bundles of notes of Rs 500 and Rs 1,000 denomination which we could not accept. The very few sales that we did manage to make were all via alternate sources of payment such as debit cards.


Specialty Chemicals: Omkar Speciality Chemicals
Mr. Pravin S. Herlekar – Chairman & Managing Director said:

  • Demonetization does not affect the company as only Pharma Corporates and MNCs i.e. B2B form its customer base and transactions have never been in cash.
  • Short term impact of the credit crunch. Good opportunity for long term
  • Demonetization has affected businesses like glass, ceramics, electroplating etc. with products they are going into consumer market alone


Auto Parts: Setco Automotive
Temporarily aberration. Demonetization is going to impact all kinds of business and everywhere because it will take people a month or two to straighten things.
Mr. Harish Sheth – Chairman and Managing Director of Setco went on to say:
If there is a crop, crop has to move, it cannot remain on the field. Similarly, cement and steel if there is a housing demand that has to move. So to move all that trucks will have to move. So the truck user will not wait for the cash or a cheque and everything he will go ahead and buy that. So profitability and other things he will have to start looking into it, but that is not what everybody is doing right now. So much of impact is there and we Indians have a generally very interesting fertile mind. So let us see what comes of it.
Specialty Finance: Canfin Homes
Canfin Homes Chief SK Hota was interviewed, and also in an exchange release, Can fin said that:

  • 88% of loans are to individuals
  • Of the rest, 6% are LAP
  • Possible downward correction in housing prices of 15% to 20%
  • 80% are salaried class borrowers
  • Banking channels only, so cash impact very low



Credit Services: Bajaj Finance
In its presentation has stated that it will have short term impact on Consumer finance (lifestyle finance, digital product finance etc.) and rural finance. Whereas segments like personal loans, Business loans are supposed to be having low impact. Other segments which include corporate finance have been put forth as segments, which are not having any impact.
But on the positive side the firm has disclosed that finance penetration will increase in rural areas along with positive uptick in the medium term. Also a likely interest rate cut might help in significant demand in medium term
Drug Manufacturers – Major: Natco Pharma
Mr. Rajeev Nannapaneni – Vice Chairman & CEO, Natco Pharma Limited said

  • Sale has dropped dramatically in the retail market
  • Overall billing in the trade has dropped dramatically
  • Overall domestic consumption has been impacted severally
  • If the demonetization chaos continue to December, we will probably have slightly lower sales than anticipated in the domestic market
  • Not seeing any problems in the supply chain currently. All we see is fall in demand at consumer level
  • Export business is not affected. Only Pharmacos with huge retail presence will have an impact.

Textile Manufacturing: SP Apparels
Mr. P. Sundararajan – Chairman/Managing Director said:

  • Very little impact in the last two three days. Impact more on the unorganized retail businesses
  • 50% business is on the retail direct from customers and another 50% through distributors – no cash dealings
  • Luckily demonetization has come after Diwali which garners maximum sales.
  • Walk Ins are generally lower after Diwali and pickup only during Christmas and New Year.
  • No effect of demonetization on the export receivables
  • Distribution will take longer from the current 60-70 days to 80-90 days.
  • Collection delays by 15-20 days and not beyond


Business Services: Karvy – Multiple Industries
Sectors where there is higher component of Cash dealings such as Real Estate and Gold may have larger impact. Unorganized players who deal in cash (not necessarily unaccounted; but the regular course of their client base) are the most impacted one.
Auto & Ancillaries

  • Expect at least 3-4 months for automobile industry to come back to normal
  • Two wheeler industry would be worst impacted – Rural India (50% consumption)  has higher proportion of cash transactions
  • Limited impact on tractor sales


  • Reduce cost of borrowing for banks and simultaneously reduces the cost of lending
  • May further worsen NPA situation
  • Housing Finance Sector and Loan Against Property – likely  to  face  significant  headwinds as they are linked to the real estate business
  • Visas, MasterCard are expected to be the biggest beneficiaries followed by banks and online payment websites such as Paytm, Freecharge, MobiKwik
  • Microfinance segment impacted as most of the transactions are in cash

Building Materials

  • Slow down in the basic building materials business i.e. tiles, sanitary-ware, paints.
  • Market share of the organized sector is about 60%. Opportunities would improve for the organized players


  • Considerable transactions happen through cash
  • Housing and Irrigation impacted along with slowdown in monetization of land
  • Dispatches affected due to transportation/ logistics

Consumer Durables

  • Expected to hurt sales in this segment in near term
  • Demand for apparels, white goods could witness near term impact


  • Pace of construction activities impacted due to delay in receivables
  • Raw Material availability issues due to transportation/ logistics


  • Reduced industry demand for movement of goods
  • Cash on Delivery transactions expected to reduce by 25%

Real Estate

  • Big negative impact with price correction in Property Market


Auto Manufacturers: Mahindra & Mahindra
M&M Logo
Welcoming the demonetization effort, M&M believes this would be very beneficial from a long term point of view. Yes, there will demand pressures due to liquidity but that will be short lived. M&M hopes demand impacted in Q3 has a potential to get compensated in Q4.
Engineering & Construction: Skipper Limited
Mr. Devesh Bansal – Director said:

  • Positive impact of the demonetization. Bullish on achieving top-line as well as bottom-line growth in the quarters to come.
  • 40-50% of the players in Polymer business are from unorganized sector. Due to the difficulties, business will move to organized sector

Credit Services: Edelweiss Financial Services
Mr. Rashesh Shah – Chairman, Edelweiss Group said:

  • Expect lot of the buying/selling of property will slow down in the next 5-6-months
  • Over the next 5-6-months as the economy realigns itself, expect that there will be some slowdown.
  • Do not see a lot of problem, but idea is to be very careful and very watchful and watch cash flows much more closely than just asset prices
  • Q2 sales may not be such a big problem, Q3 sales may slow down a little bit.
  • Not a long-term problem. Expect real estate prices to come down by 8-10%
  • Q3 will be monitored closely. If the actual flow slows down, if the velocity slows down on a consistent basis going forward, then there will be a cause for concern.
  • NBFC’s – disruption for 3-4-months which would show up in actual disbursements. A much larger risk is when the economy freezes out and paralyzes which the government and RBI may not allow.

Publishing: Navneet Education
Mr. Sunil Gala ‐ Managing Director said:

  • Do not foresee issues as books are not priced beyond Rs. 100
  • Revenue is higher generally in H1 than in H2
  • Effect on trade, Negative Impact will not last for more than six months


Diversified Industrials: Greaves Cotton
Do not see any impact either short term or long term in terms of the growth of the farm business. Agri Pumps and Power Tiller are absolutely rightly placed. With the improving economy, with the size of economy improving, we see a positive impact on our business.
Real Estate – General: Godrej Properties

Rubber & Plastics: Apollo Tyres
Mr. Gaurav Kumar, Chief Financial Officer said:

  • End Sale of tyres in Rural areas is cash based which will have some impact
  • Impact the Chinese sales even more which is good for the Industry


Credit Services: Ujjivan Financial Services
Do not expect any significant change in terms of disbursement and collections once the old currency notes have been exchanged. Short term impact for upcoming loan repayments and cash disbursements which have been deferred due to absence of the right kind of currency.


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