The above crisis however comes at a time when commodity prices were already at historical highs and

many companies had resorted to raising their prices to protect margins. We believe companies would find

it difficult to pass on further increases without impacting demand. This is relevant not just for India but

globally as well. While it is still too early to factor in the impact on demand or margins, the longer the Ukraine

crisis lasts, the greater the risk to earnings downgrades. The recent market correction does however factor

in some potential cuts to earnings. We are less concerned about stress on the balance sheets of corporate

India as most companies have been deleveraging over recent years. Even the banking system is well

capitalized with banks sitting on surplus liquidity.

To end on a positive note, assembly elections in five states were just completed and the Modi Government

emerged victorious in four of the five states. This included Uttar Pradesh, India’s largest state with a