On the other hand, while it will help improve rupee earnings, the greenback's rise against other currencies (8.4 per cent against the euro and 8.8 per cent against the pound) would mean a hit in dollar earnings, which will reflect in the US GAAP numbers of companies. For example, Infosys derives around 28 per cent of its revenues from these currencies (euro and pound).
Due to this, analysts feel that the company could miss its FY09 US dollar revenue growth guidance of 19-21 per cent by about 1.5-2 percentage points. (Rupee's appreciation against the euro and pound has been marginal at less than one per cent since July 1).
On an average, analysts expect the net impact of currency movements to be positive to the tune to 1.5-2.5 percentage points at the operating level for Q2FY09 for most of the companies. But, for the full year ending March 2009, the profitability is likely to be under pressure and operating margins are expected to reduce by the same range due to the existing tough business environment.
Image: Employees of ITC Limited and US-based Client Logic Corporation work in a call centre in Bangalore. | Photograph: Indranil Mukherjee/AFP/Getty Images
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