Rupee fall may not prop up margins of IT cos\, attrition\, pricing to weigh

Rupee fall may not prop up margins of IT cos, attrition, pricing to weigh

Higher pricing pressures in legacy business and rising costs of delivery have been negating margin benefits from rupee depreciation over the last two years

Shreepad S Aute 

The Nifty IT index has outperformed the Nifty 50 in the past one month and is currently near its two-month highs, thanks to a weak rupee, which fell by a sharp 99 paise against the US dollar last Tuesday. A weak rupee typically provides near-term support to margins of information technology (IT) companies.

Analysts estimate that margins tend to gain by 20-25 basis point for every 1 per cent depreciation of the rupee against the US dollar. However, this time, it may be too early to think about any likely margin improvement. Factors such as higher attrition, elevated sub-contracting ...

Note: Subscription will be auto renewed, you may cancel any time in the future without any questions asked.

Total Amount
Rs. 149.00
Requires personal information

What you get?

ON BUSINESS STANDARD DIGITAL

  • Unlimited access to all the content on any device through browser or app.
  • Exclusive content, features, opinions and comment – hand-picked by our editors, just for you.
  • Pick 5 of your favourite companies. Get a daily email with all the news updates on them.
  • Track the industry of your choice with a daily newsletter specific to that industry.
  • Stay on top of your investments. Track stock prices in your portfolio.
  • 18 years of archival data.
  • Requires you to share personal information like date of birth, income, location amongst other fields. This information alongwith your contact information will be shared with the partners associated with this program, who contribute towards subsidizing the offer. By subscribing to this product you acknowledge and accept that our Partners may choose to contact you with offers of their products and services.
  • This is an optional offer - Not comfortable with sharing personal data - please opt for the full price offer which requires you to share minimal information
Read our full coverage on Rupee fall
First Published: Wed, September 11 2019. 13:44 IST