Many Indian companies may have to pay through their nose in the wake of continued fall in rupee over the last few months. However, exporters getting orders now will be in a position to rake in higher profits.
Rupee weakened by 8.57 per cent against the US dollar over the last one month to close at Rs 46.34 on Wednesday. The domestic currency has lost ground by 17.58 per cent during 2008 to-date.
“Sector-wise, information technology, textiles, and gem and jewellery stocks may find favour in the stock markets,” said Siddhartha Sanyal, economist and VP, institutional equities research, Edelweiss Securities. “Besides smaller sectors like leather, jute and handicrafts also will benefit from falling rupee.”
Exporters may post higher revenues if they had not hedged their receivables. Exporters who have hedged (ensuring the value of receivables at a specific level) may have to provide for the notional (mark-to-market) losses they have incurred in the wake of falling rupee value.
“Despite having substantial exports, pharma sector may not gain much as they have to import a lot of their inputs, said Sarabjit Kour Nagra, VP, research, Angel Broking.
Companies that have borrowed from external sources in dollar-denomination would have to shell out more.
Ultimately, the rupee fall leading to rise in import costs is also set to slowdown the pace of fall in inflation in the next few months. Oil companies would continue to seek more dollars for meeting their import requirements.