WIN SOME, LOSE SOME

IT, pharma, rice exporters to gain; automobiles net positive

- URVI MALVANIA, MANU KAUSHIK, SANDIP DAS, NITIN KUMAR, NARAYANAN V & KRISHNA BAROT

THE RUPEE'S SLIDE towards the 90-per-dollar mark has begun to filter through the major export-linked sectors, offering relief to some and little to others.

While IT services, pharmaceuticals and rice exporters stand to gain from stronger dollar realisations, the textile and apparel industry continues to contend with tariff pressures that blunt the usual upside of a weaker currency.

In the IT sector, where close to half of revenues originate from North America, the depreciation provides a straightforward earnings lift. Dollar-denominated contracts translate into higher rupee revenues, strengthening operating margins for large-cap companies such as TCS and Infosys. This comes at a time when deal activity is being driven by clients consolidating vendors and seeking sharper pricing.

"With the weaker rupee, Indian IT firms can offer higher discounts without much impact on margins, helping the order book," Pareek Jain, founder and CEO of EIIRTrend, told FE. The currency move gives companies more flexibility on pricing without diluting profitability, particularly in renewal and long-tenure deals.

Pharmaceutical exporters are similarly placed. India ships more than $30 billion worth of medicines annually, with the US remaining the largest market. A weaker rupee improves realisations for major exporters such as Sun Pharma, Lupin and Zydus.