Effect of Declining Rupee on Various Sector

Decline in rupee vis–vis the dollar over the past few days has focused all eyes on the sectors which have a large overseas play as it will have visible effect on the fortunes of companies. IT companies and pharma sectors and selected auto companies who have foreign exchange exposure are expected to generate better bottom line due to falling rupee. Among other sectors, healthcare and metals are also expected to come up with a fairly good set of numbers, owing to the dollar impact.

This rupee fall in last few days will be advantageous for software exporters who are making a big bet so as to improve outsourcing demand in United States and Europe Rupee has gone down 202 paise, or 3.17 per cent, in last two weeks after Beijing astonished the world by devaluing the yuan. . This fall in the rupee may improve operating margin of software exporters by 30-50 bps.

Cloud computing, big data and analytics and other digital solutions are areas where Indian IT exporters are witnessing a strong footing. TCS, Infosys and HCL Tech have bagged large number of orders in these segments . Indian IT players have been spreading their tentacles  in US and some areas of Europe. This fall in rupee will prove beneficial mainly for IT players and it will have visible effect on their Q2 results.