IIPM Ranked No. 1 B-School In Global Exposre - Zee...
The key beneficiaries from the rupee appreciation will be the importers;
We have already seen IT companies losing in this streak of rupee appreciation. Only TCS saw its EBIDTA margins stable at 22.7% for the quarter ending June 2007; Satyam could arrest the fall at 22.4%, down 64 bps. Wipro’s margins were down 199 bps at 19.4%. Infosys’ margins were at 28.7%, down 300 bps. No wonder why rupee appreciation has made it to the list of challenges that NASSCOM (according to the latest Indian IT Software & Services Revenues release) considers facing the Indian IT companies. Apart from IT, pharmaceutical, gems & jewellery and auto component sectors are also a part of the unhappy lot fearing a squeeze in margins because of this rupee appreciation.
But, as they say, one man’s plight is other man’s blessing. The key beneficiaries from the rupee appreciation will be the importers; particularly companies from energy dependent sectors are likely to benefit in a significant manner (energy, paints and few textile majors). Companies that source raw materials from the global markets and are largely domestic demand driven, could also potentially experience margin improvements. Besides companies, rupee appreciation is also a positive for the government’s finances and the capital goods sector.
Moving a step further, the firms that relied much on dollar borrowings are breathing a sigh of relief, as interest expenditure on such dollar borrowings in rupee terms has reduced (the same applies for the government, when it takes overseas loans); hence the servicing of overseas debt has become cheaper to a large extent. Companies like HDFC, Bharti-Airtel, Lafarge, Jindal Steel & Power and Jaiprakash Associates et al have significant overseas borrowings.
Even in pharma – where companies like Ranbaxy, Sun Pharma, Lupin & Jubilant Organosys have collectively raised almost $1.1 billion by way of ECB/FCCBs in H1 2007 – the gains are huge. As Malvinder Singh, CEO, Ranbaxy, comments to B&E, “Out of $500 million of foreign debt that we have, close to $440 million is by way of FCCBs & as the rupee appreciates, it will definitely work in our favour.” The April-June 2007 results of Ranbaxy, which surprisingly show forex gains of Rs.2.014 billion, are a clear testimony.
For more articles, Click on IIPM Article.
Source : IIPM Editorial, 2008
An Initiative of IIPM, Malay Chaudhuri and Arindam Chaudhuri (Renowned Management Guru and Economist).
Read these article :-
B-schooled in India, Placed Abroad (Print Version)
IIPM in Financial times (Print Version)
IIPM makes business education truly global (Print Version)
The Indian Institute of Planning and Management (IIPM)
IIPM Campus
ZEE BUSINESS BEST B SCHOOL SURVEY
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The key beneficiaries from the rupee appreciation will be the importers;
We have already seen IT companies losing in this streak of rupee appreciation. Only TCS saw its EBIDTA margins stable at 22.7% for the quarter ending June 2007; Satyam could arrest the fall at 22.4%, down 64 bps. Wipro’s margins were down 199 bps at 19.4%. Infosys’ margins were at 28.7%, down 300 bps. No wonder why rupee appreciation has made it to the list of challenges that NASSCOM (according to the latest Indian IT Software & Services Revenues release) considers facing the Indian IT companies. Apart from IT, pharmaceutical, gems & jewellery and auto component sectors are also a part of the unhappy lot fearing a squeeze in margins because of this rupee appreciation.But, as they say, one man’s plight is other man’s blessing. The key beneficiaries from the rupee appreciation will be the importers; particularly companies from energy dependent sectors are likely to benefit in a significant manner (energy, paints and few textile majors). Companies that source raw materials from the global markets and are largely domestic demand driven, could also potentially experience margin improvements. Besides companies, rupee appreciation is also a positive for the government’s finances and the capital goods sector.
Moving a step further, the firms that relied much on dollar borrowings are breathing a sigh of relief, as interest expenditure on such dollar borrowings in rupee terms has reduced (the same applies for the government, when it takes overseas loans); hence the servicing of overseas debt has become cheaper to a large extent. Companies like HDFC, Bharti-Airtel, Lafarge, Jindal Steel & Power and Jaiprakash Associates et al have significant overseas borrowings.
Even in pharma – where companies like Ranbaxy, Sun Pharma, Lupin & Jubilant Organosys have collectively raised almost $1.1 billion by way of ECB/FCCBs in H1 2007 – the gains are huge. As Malvinder Singh, CEO, Ranbaxy, comments to B&E, “Out of $500 million of foreign debt that we have, close to $440 million is by way of FCCBs & as the rupee appreciates, it will definitely work in our favour.” The April-June 2007 results of Ranbaxy, which surprisingly show forex gains of Rs.2.014 billion, are a clear testimony.
For more articles, Click on IIPM Article.
Source : IIPM Editorial, 2008
An Initiative of IIPM, Malay Chaudhuri and Arindam Chaudhuri (Renowned Management Guru and Economist).
Read these article :-
B-schooled in India, Placed Abroad (Print Version)
IIPM in Financial times (Print Version)
IIPM makes business education truly global (Print Version)
The Indian Institute of Planning and Management (IIPM)
IIPM Campus
ZEE BUSINESS BEST B SCHOOL SURVEY
For More IIPM Info, Visit below mentioned IIPM articles.
1500-plus IIPM students placed across the country with 44 bagging international offers
IIPM set to beat economic slowdown
IIPM, GURGAON
IIPM - Admission Procedure
IIPM awards four Bengali novelists
The Hindu : Education Plus : Honour for IIPM
IIPM ranked No.1 B-School in India, Management News - By ...
IIPM Ranked No1 B-School in India
Moneycontrol >> News >> Press- News >> IIPM ranked No1 B-School in ...
» IIPM ranked No1 B-School in India :: Education, Careers ...
The Hindu Business Line : IIPM placements hit a high of over 2000 jobs
Deccan Herald - IIPM ranked as top B-School in India
India eNews - IIPM Ranked No1 B-School in India
IIPM Delhi - Indian Institute of Planning and Management New Delhi ...
domain-b.com : IIPM ranked ahead of IIMs
IIPM makes business education truly global-Education-The Times of ...
