Will demonetisation hurt India Inc in upcoming quarters?

The move to demonetise Rs 500 and Rs 1000 notes has certainly encouraged electronic money and non-cash transaction to a significant extent. But here is a look at the sectors which are affected by the move of the centre. The decision to demonise high denomination notes has left the economy gasping. Auto, Cements, Paints, Real Estate, are the sectors which will have short term pain as this sector depends more on physical cash. 
 
The demand for two-wheelers is going to get largely affected in the upcoming quarter as in this sector around 40 per cent of finance is made through financing and rest through cash. But in the passenger vehicles segment, close to 75 per cent of sales are either through financing, or even down payments are made mostly by cheques -so this segment could face less heat.  The auto index has fallen over 11 per cent since November 9.

Cement and Real Estate industry are inter-related to each other. Many real estate experts are expecting the prices to correct by 30 to 40 per cent. However, the companies operating in tier 2 and 3 cities are expected to get affected, which have many of their deals in cash. Tier 1 developers' cash transaction has not been affected much. The Real estate since November 9 has fallen by 8 per cent.
 
Paints companies could also witness drop in sales which have larger component in cash. These sectors may witness timid quarters in the upcoming months with significant correction in their share prices.