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Rupee's fall makes hardware inventory significant

In the case of Indian software development companies, however, this fall is welcomed for it brings in more unexpected revenues.

T O D A Y

• 1600-160-559 • EMMIT '98 • New IIM programme • Rupee troubles again

The extent of inventory has suddenly assumed significance, for companies with inventory need not immediately pass on their additional costs to customers.

According to Alok Ohrie, country marketing manager, personal systems group, Tata IBM "Our range of PC products are entirely imported and therefore any appreciation in the value of US dollar will increase the cost of our products. Whether the costs are passed on or not depends on the extent of inventory. However, prices will go up in the long run."

"It (the fall in the rupee's value) does bring extra pressure on us. We are put on the defensive. It is not always possible to pass on increased costs because of competitive pressures," said S C Senapaty, executive vice-president, finance, Wipro Corporation.

He said the recent dips in the rupee's value "is a real problem, for, when you want to take a view of the market, your planning gets muddled up".

As the prices of components such as processors or disk drives that go into making computers change frequently, price lists are drawn up fortnightly or monthly out of necessity, but it is changing currency values that create problems which are not the case with software development companies in India.

- Compiled from the Indian media

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