Worsening outlook

Fundamentals warrant stock price correction

A series of adverse global developments have led to a deterioration of prospects for Indian companies. The Ukraine War has led to spikes in fuel prices and that of metals, paper, fertilisers, and wheat since Russia and Ukraine are major producers of those commodities. It has also meant a new round of semiconductor shortages due to shortage of neon. The rising energy import bill, and widespread supply-chain issues will lead to new upward pressures on the already-high inflationary trends. Corporate results in the December quarter indicated inflation was eating into profit margins and there may be more sustained margin pressures,