Weak Rupee to Spur IT Rebound

Heads Up, IT! A depreciating rupee augurs well for the IT sector's revenue growth and margin outlook. Indian IT firms are gaining traction in AI services, investing in GenAI and launching new platforms.

- Harsha Jethmalani

The Indian information technology (IT) sector has been trying to make a meaningful comeback for a while. The good news is there's some respite on the horizon at last. The rupee is depreciating against the US dollar and other developed-market currencies, hurt by the ongoing global turmoil.

The rupee hit an all-time low earlier this month, breaching 87 to the dollar as improving prospects of the US economy gave the greenback a boost. So far in 2025, the rupee has declined by 1.3% against the US dollar, 1.4% against the euro, and 1.8% against the British pound.

From a macro perspective, a sinking rupee spells trouble, mainly for importers, but India's IT firms are exporters of services and a large part of their revenue is denominated in these currencies. So, a depreciating rupee augurs well for the sector's revenue growth and margin outlook.