The 2013 Indian IT result cheat sheet, FX gains for other industry

After the 27% depreciation on the Rupee to Rs 55 per dollar, The indian It companies with unhedged exposure ( TCS probably hedges only a quarter worth of billing, after its Q3 fracas when it lost INR 1 B in forex translation losses). Even Infy and others except for HCL remain unhedged for more than a quarter currently making up for each quarter’s level with the current 27% depreciation since January (USDINR at Rs 44) 

However that means the small FX gains on $5B of Q1 and $6 B of Q2 revenues for the Top 4 firms excl CTS would yield extraordinary gains of nearly $400 mln each and the same even if only 50% is hared with key clients would mean extra savings thus just ensuring near period growth in outsourcing business but perhaps enough to maintain long term growth in the Industry

Non IT businesses like Energy and Automotive however will still be stuck with rupee purchase agreeemnts and likely pass by gains on Dollar earnings from the depreciation in the rupee while the costs for FCCB/other ECB borrowings will rise another INR 100 B for Indian companies having borrowed at 6% levels yet.

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