India Today - - ECONOMY -

Since the raw ma­te­rial com­po­nent is high for In­dian com­pa­nies, the prof­its of Cor­po­rate In­dia will likely be hit. quar­ter mone­tary pol­icy re­view on June 17. On a pos­i­tive note, the weak ru­pee will bring cheer to ex­porters, es­pe­cially those in the ap­parel and IT sec­tors. In­dia’s ap­parel ex­ports have been strug­gling, fall­ing 5.76 per cent to $ 12.92 bil­lion in 2012- 13 due to a slow­down in Europe and the US. The weak ru­pee will put more money in ex­porters’ hands. For IT com­pa­nies, the ru­pee’s fall of 6.5 per cent could mean a boost of 180- 240 ba­sis points to op­er­at­ing profit mar­gins.

“The ru­pee is headed to 60 against the dol­lar,” says Sub­hash Gan­gad­ha­ran, se­nior tech­ni­cal and de­riv­a­tive an­a­lyst at HDFC Se­cu­ri­ties. “It could reach there in a week or two. That will have a neg­a­tive im­pact on eq­uity mar­kets.” The volatil­ity in the mar­ket is ex­pected to stay. Even when the ru­pee sta­bilises, it would set­tle at a higher range of 55- 58 with 56 serv­ing as a sign­post, says Care Rat­ings. For those like Ra­jashekhar who have to man­age cur­rency fluc­tu­a­tions as they threaten to eat into prof­its, the tough times are not go­ing to blow over so eas­ily.

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