Bangalore:India's export-driven IT services industry would see an erosion in margins due to the strengthening of the rupee, a top official of Infosys Technologies said on Friday.
"Every one percentage point appreciation will have an impact of between 30 and 40 basis points on the margin," the NASDAQ-listed firm's Chief Operating Officer S Gopalakrishnan said.
Strengthening of the rupee would definitely have an impact on the margin, he told reporters on the sidelines of a seminar organised by Confederation of Indian Industry here.
"The estimates depend on how much business happens, in which location and in what currency," Gopalakrishnan said.
The value of the rupee has risen by nine per cent against the US dollar since December 2006 and was trading at Rs 40.90 a dollar in the morning trade on Friday.
Currency hedging, he said, was a short-term measure to offset the impact of the strengthening rupee. "Companies need to look at their portfolio of services, the geographies in which they sell and the prices that they charge from customers to mitigate the impact," he added.
Comments
0 comment