Rupee Appreciation/Depreciation Affecting Companies

Rupee is a great tool to analyse the companies performance as any abnormal increase or decrease of its price against dollar affects the functioning of Indian companies to a great extent. The companies are hurt on account of large foreign debt, large importers or exporters and their performance/profits is effected. The names of companies are as appended below:

Companies Hurt by Rupee Depreciation – Large Foreign Debt

• Jet Airways : $2 billion FCCB
• Reliance Communications : $6 billion FCCB
• Bharti Airtel : $11 billion debt
• Tata Steel  : $1.75-2 billion debt
• JSW Steel : $1.40 billion debt

Companies Hurt by Rupee Depreciation – Large Importers

• Maruti Suzuki: Imports components from Japan & royalty will rise
• Adani Power: Over 50% of the coal used is imported
• JSW Energy: Over 50% of the coal used is imported
• India Cement: Over 65% of the coal used is imported
• Hindustan Unilever: Directly imports around 24% of its raw materials

Companies Hurt by Rupee Depreciation – Large Exporters

• IT, Pharma: Net exporters to benefit from weaker INR
• Tata Motors: JLR’s GBP profits to translate into higher INR profits
• Bharat Forge: Overseas operations are largely Euro denominated
• BHEL: Competitive intensity of Chinese equipment makers to reduce
• Cairn India: Entire revenue earned & most of the cash held in dollar.

The moral of the whole story is that some are benefitted and some lose by virtue of currency fluctuation and it is part of game. Importers lose and exporters gain by virtue of rupee depreciation and vice versa true for appreciation. Do check out the base rate which is regulated by RBI and also check out ForexTrading in India and read comments under the given links to understand the appreciation and depreciation of rupee.