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Weak rupee benefited Infosys in Q2: CFO
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SME Times News Bureau | 17 Oct, 2018
A weakening rupee against a strong US dollar benefited Indian software
export major Infosys in the second quarter of fiscal 2018-19, said its
Chief Financial Officer (CFO) M.D. Ranganath on Tuesday.
"We
benefited 80 basis points (0.8 per cent) due to depreciating rupee
during the quarter. We also got benefit of another 70 basis points (0.7
per cent) owing to higher pricing and onsite moderation. The overall
benefit was 150 basis points or 1.5 per cent," Ranganath told IANS here.
Currency
volatility due to global and regional factors impacted the Indian
rupee, which weakened 5.5 per cent in the quarter under review (Q2) to
Rs 72.49 by September 30 from Rs 68.91 on July 1 per dollar.
"The
benefit was, however, neutralised by 100 basis points (1 per cent) due
to compensation, attrition, investments and sub-contractor expenses in
dollars," noted Ranganath.
Admitting that the company was also
impacted by cross-currency fluctuations, the outgoing CFO said differece
between the reported growth and the constant currency growth was 1 per
cent on its non-operating income.
"About 70 per cent of our
revenues are in US dollar and the remaining 30 per cent is a combination
of Australian dollar, Euro and British pound," said Ranganath.
A veteran Infoscion, Ranganath, who resigned from the executive post on August 18, will leave the iconic company on November 16.
Noting
that a volatile rupee had a plus and minus impact during the quarter,
Ranganath said the company made certain assumptions on the rupee based
on which it hedges.
"We do not disclose the hedging rate, as it's a competitive number," he quipped.
Recalling
that currency volatility was not new to Infosys, Ranganath said the
company had navigated through extreme currency movements due to Brexit,
the US election and global events.
"Over the last 13 quarters we
have effectively navigated the volatility through our hedging policies,
which have worked for us keeping the effects minimal," added Ranganath.
"But we do not renegotiate the contracts for billing on quarterly basis," he clarified.
Nearly
98 per cent of the company's revenue is generated through the export of
software services and products, with 60 per cent of it in US dollars.
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Customs Exchange Rates |
Currency |
Import |
Export |
US Dollar
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66.20
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64.50 |
UK Pound
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87.50
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84.65 |
Euro
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78.25
|
75.65 |
Japanese
Yen |
58.85 |
56.85 |
As on 13 Aug, 2022 |
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