DEPRECIATING RUPEE ALLOWED TO HIKE PROFIT
The earnings season for what was perhaps the most difficult quarter so far for most companies in recent years has kicked off with a pleasant surprise as
However, company’s operating margins during the quarter increased primarily due to a depreciation of the rupee .A depreciating rupee against the us dollar helped this major it service provider and exporter to marginally shore up its revenue and profit for the third quarter ending December 31 ,2008.
In the dollar terms the topline was 3.7% down. If smaller IT firms such as Mastek did not manage to escape the impact of economic turmoil and currency fluctuations as evident from its slower 16% growth in profit. So, how could market leaders- Infosys escape sluggish growth? Infosys cannot escape the impact of economic turmoil. It is the depreciation of rupee against the dollar, that has allowed Infosys to present a
rosy picture of Q3 results. Further, the cut in its Q4 guidance (in dollar terms), indicates
clearly that Infosys expects the deteriorating economic conditions to hurt its bottom line. Both revenues and profits improved operational efficiencies Addition of new clients
will be under pressure in 2009-10 and the growth in dollar earnings could be short of even 6-7%. It would face a challenging environment for the next 12 to 18 months.
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