New world order! Realty, healthcare among sectors that will transform the most, says Edelweiss


MUMBAI: Brokerage firm Edelweiss Securities believes that the global and Indian economy are entering a new world order post the Covid-19 pandemic, which is somewhere between a crisis and a revolution.

“It is the harbinger of a new economic and world order, an accelerated and pretty sustainable shift for the decade ahead—and yet builds on the economic, technology, consumption and corporate rails that we have been progressively familiar with,” the brokerage firm said in a report today.

The brokerage firm believes India will be the frontrunner in the new world order because of its middle-income status, higher growth rates, younger demographics and nascent development.

The brokerage believes that in the post-pandemic world order, sectors such as real estate, digital, automation, healthcare, media and retail, and green energy will see the most transformation.

In real estate, the brokerage firm believes that the hybrid work model will entrench itself as not all employees will be comfortable working from home all the time. In the age of social distancing, Edelweiss Securities argued that office spaces will become wider to allow for safe distancing.

In the digital space, the brokerage firm believes that the government needs to push its investment in the digital payment and social security infrastructure through the National Payments Corporation of India and Aadhar.

“We believe India’s digital evolution is likely to be unique. Globally, the digital push has been driven by incremental productivity upticks graduating to digital adoption. In India, the government created foundational blocks to lower the cost of digital adoption, which democratised the benefits of digitalisation,” Edelweiss Securities said.

In the healthcare sector, the brokerage believes that the pandemic has given a major fillip to e-pharmacies and teleconsultation. “We expect e-pharmacies to create an ecosystem of healthcare services for the convenience of patients, doing away with the need to step out of their homes,” the report said.

As for the telemedicine market, Edelweiss said that the market size of telemedicine could cross $5.5 billion by 2025 in the country.

In the retail and media sectors, the brokerage sees the maximum disruption. Edelweiss said that with more consumers directly consuming content online, advertisers are likely to spend more money on digital advertising, which could put traditional media such as radio and print under threat.

“In retail, the shift in consumer behaviour has seen the sector transition from bricks alone to a combination of bricks and clicks, and pushed retailers to move beyond the traditional view that physical locations are primarily for in-store customer engagement,” the brokerage firm said.

Edelweiss Securities expects India to achieve significant scale in automation going forward with wide-ranging industries adopting automation depending on how export markets pan out. The firm said that post-pandemic cost challenges and the need to achieve scale quickly makes a stronger case for manufacturing companies in India to gun for higher automation and outsourcing of technology and process to leaders.

The last sector Edelweiss Securities believes will see transformation is the energy sector, wherein the pandemic has accelerated the adoption of cleaner energy. “We maintain that the rise of EVs is ineluctable, globally and in India—only the speed will differ. If OEMs fail to keep up with evolving consumer trends, they run the risk of obsolescence, which could damage their market capitalisation,” the brokerage firm said.

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