IT entrepreneurs looking for new ways to tackle Indian rupee

Bharat49

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posted on 10 years ago — updated on 1 second ago

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The rupee had touched its lifetime low of 68.85 against a US dollar in August last year, but has strengthened since then.

Mumbai: India's IT entrepreneurs are looking at various options to minimise the impact on their bottomlines of the strengthening of the rupee against the US dollar. While these entrepreneurs have started quoting in dollars to their clients abroad, they are also parking part of their earnings from foreign clients at their offshore offices.

"We keep certain part of our funds offshore too like US subsidiary account," Globussoft CEO Sumit Ghosh said. It has helped us a lot in "tackling the Indian rupee against US dollar", he said. The digital media software firm Globussoft claims to have 4,500 customers in more than 50 countries.

"While we were able to gain due to rupee depreciation during past few months, the sudden appreciation of the Indian currency has prompted to hedge our risks so as to avoid the hit," said Ghosh.

Nearly 15-20 per cent income of Array Networks, which is into application delivery networking, comes from its clients abroad. Hence, the company has started quoting in US dollar from its clients abroad.

"Most of our products are imported, while all of our orders are in INR. When there is a delay in the projects, it really hurts the bottomline of every player including OEMs," regional sales director-India, ME and SEA at Array Networks, Shibu Paul said.

"We have requested some of our Indian global customers to place orders in US dollar in US for meeting our global requirements," he said. Taking orders in US dollar helps in controlling fluctuations, Paul added.

Netrack Enclosures, which acts as a single window solutions provider for all data, network and server-related concerns, feels that appreciation is bad for exporters. "We earn less profit if input cost is not reduced," brand head, director sales & support at Netrack, Ravi Raj said.

The rule is, if rupee appreciates, input material cost should reduce and balance out, he added. The rupee had touched its lifetime low of 68.85 against a US dollar in August last year, but has strengthened since then. On Friday it closed at 59.17 per US dollar.