Will Covid resurgence impact Indian stocks in 2023? Here's a two-face analysis

NEW DELHI: Rising Covid cases in China and the chances of new BF.7 Omicron sub-variant's rapid spread in India have left a section of investors a worried lot. Domestic brokerage Motilal Oswal sees Covid to faint into a non-event in 2023 and believes that a mild spread of the infection won't have a debilitating impact on stocks.

"Covid is less likely to surge in India given comprehensive vaccination coverage and early preparedness by the government," Motilal said in a report. While presenting a two-scenario analysis of the impact of Covid, in case it hits India as well, the brokerage said if the spread is mild (80% probability), it will not have any negative impact on any sector.

However, if the Covid 4.0 spread is moderate to severe (20% probability), it will affect airlines, multiplexes, hotels and retail/QSRs.

On the other hand, Covid will have a positive impact on stocks of companies related to diagnostics, testing kits, hospitals and Covid medicine manufacturers.

Stocks that may get positively impacted from Covid according to the brokerage

Diagnostic: Metropolis, Dr Lal Pathlabs, Thyrocare, Vijaya Diagnostic and Krsnaa Diagnostic.

Hospitals: Apollo Hospitals, Aster DM Healthcare, Shalby, Narayana Hrudayalay, Krishna Institute.

Pharma: Cipla, IOL Chemicals, Granules, Glenmark and Zydus Lifescience.

Moderate to high spread of Covid would be negative for these stocks

Travel and tourism: Interglobe Aviation, Easemytrip, Indian Hotels, Lemon Tree.

Multiplex: PVR and INOX Leisure.

Retail: Titan, ABFRL, Trent and Shoppers Stop.

QSR: Westlife Foodworld, Jubilant Food, Devyani International, Restaurant Brand.

Top picks for 2023
Motilal has SBI, Axis Bank, L&T, Ultratech, Macrotech Developers, Bharat Forge, PI Industries, Maruti, ITC, Titan, Indian Hotels, Westlife Foodworks, Infosys and Apollo Hospitals as among its top picks for the new year.

(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of The Economic Times)