Large firms can take another 15% rupee drop due to natural hedge: Moody's

Analysing 22 rated Indian firms, Moody's found nearly half of them had dollar revenues or contracts priced in US dollars that protect the local earning

Indian companies that generate revenues in rupee but rely heavily on foreign debt are relatively well protected against rupee depreciation, even as the 3 per cent year-to-date depreciation in the rupee would be temporarily credit negative for them, rating agency Moody’s said on Thursday.  

"Most companies have protections to limit the effect of currency fluctuations. These include natural hedges, some US dollar revenue and financial hedges, or combination of these factors, to help limit the adverse effect on cash flow and leverage, even under a more severe deprecation scenario,” Moody’s said.  

Therefore, the current rating level could be protected even