IMPORTERS TO TAKE A HIT

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.