The profits of more than half the Indian companies have remained unaffected by the downfall of the Indian Rupee. 50% of the companies in India which are rated by American agency S&P Global have reported no effects of the downfall. As per a report from S&P Global, issued on Thursday, most of the companies are such, a large amount of whose income comes from the export of goods and services, and their income is dependent on USD rather than Indian rupee. Hence, with the increase in the value of USD, their income and profits are increasing as well.
As per the rating agency, the pre-tax profits of more than half the companies which are rated by it increased in the July-September quarter, and most of them are IT, chemical, metal, and telecom sector companies. What is noteworthy is that a large portion of these companies’ income is in USD, but most of their expenses are made in the local currency, that is, rupee, and that is why, they are enjoying profits. Apart from this, companies like Airtel have managed foreign debt in rupee as compared to USD very well, and therefore, the downfall of rupee did not affect them much.
S&P Global rates around 20 thousand Indian companies.
On the other hand, the companies associated with infrastructure have been hit then worst because of the downfall in Indian rupee. Apart from this, the capital expenditure of renewable energy companies are more, and their dependence on dollar debt is more as well, and that is why, these companies are affected more because of the rupee dwindling.
