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| Rupee's exchange rate still a challenge: HCL Tech |
| Press Trust of India / New Delhi Jan 31, 2010, 15:18 IST |
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The country's fourth-largest software exporter HCL Technologies today said volatility in rupee's exchange rate is a major challenge for the company.
"We see a lot of traction and a lot of deal flow happening in the marketplace led by operating efficiency and cost saving steps.... We definitely see exchange rate as one of the challenges, company CFO Anil Chanana told.
Most of the Indian IT companies earn a big chunk of its income from abroad in foreign currencies and the rupee's value against the dollar is vital for them. A stronger rupee is not beneficial to any exporter including software exporters like HCL and the rupee has appreciated 3-5 per cent in the last two quarters.
He, however, said as far as the net income is concerned the company in the next 8-9 months would be indifferent to the exchange rate -- the value of the rupee vis-a-vis US dollar which is susceptible to many factors in the forex market.
"Since we are already hedged, any movement does not impact. At the moment sufficient hedge available."
It also has foreign exchange hedges worth $645 million for the next nine months.
The company's loss in foreign exchange was $27 million in the October-December quarter, down from $31 million in the previous quarter.
Chanana also said any salary hike for employees is unlikely as an increase now would put pressure on the margins. In October last, the company had announced up to 10 per cent increase in salaries.
The salary hike in October has 130-basis point erosion in its margins, while 15 basis points were shaved off by exchange rate fluctuations leading to a total erosion of 145 basis points.
New Delhi-based HCL Technologies posted 20.5 per cent fall in net income for the second quarter ended December 31, 2009, owing to wage hikes and currency fluctuations.
The company has improved its loan position as its net borrowing position has come down significantly.
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