Impact on IT bcz of appreciation of rupee
Companies like Infosys and Wipro declined to comment on the issue as they are observing a quiet period before the announcement of annual results mid-April. Analysts are however sure that the surge in the rupee will depress profits of the top IT companies like it did in the past few quarters.
In Q3, when rupee appreciated 3.8%, Infosys operating margins was affected by nearly 200 basis points and caused a revenue loss of Rs 146 crore. Wipro suffered a margin squeeze of 60 basis points. Infosys billed Q3 2006 at an average rupee-dollar rate of Rs 44.53 against close of Rs 43.05 on Wednesday.
Says an analyst, On an average, the rupee would have appreciated by 2-3% in the fourth quarter and this will impact profits of software companies adversely.
However, analysts also say that over t ...more
Let's say we reach a agreement where I pay you 10,000 dollars and you do a 6 month website for me. If 45 Rupees = 1 USD, you get 4,50,000 Rupees. But say, the Rupee appreciates to 39 Rupees = 1 USD, then you'd get 3,90,000....so just from Forex, you have lost 60,000 Rupees just like that. And remember, you pay all your bills back home in Rupees.
So, if there is an appreciating trend in the market, in the same example as above, if I am a US IT PO giver and you are an Indian IT service provider, for example, if fluctuation trend is 45-39, I may set a rate for you at 41. Or somesuch...but you still lose.
But if you are importing from the US, you have a good life.
Let's say you are an Indian importer (of goods and/or services) and I am a US supplier. If the Rupee is stronger, my purchasing power in terms of dollars incrases, so my clout i ...more
there is some more reasons.