Rupee vs Dollar: The US dollar is getting stronger internationally. Currencies of all countries are depreciating due to that blow. Our rupee is no different. Set to hit a lifetime low of 80 against the dollar! Some analysts are not surprised if it reaches 81.
The exchange rate of the rupee is closely watched by stock market circles. How much is growing? Every moment they check how many points are decreasing. Buying and selling of shares of companies here is done considering the rupee value. Which stocks will benefit as rupee nears lifetime lows? Traders are predicting who will lose. Simply put, good for exports. Bad for imports!!
IT companies are the biggest beneficiaries of rupee depreciation. Half of their earnings are in dollars. The reason for this is that most of the software products are exported abroad. Experts say that companies like TCS, Infosys, HCL Technologies, Wipro, Tech Mahindra and Mindtree will have high dollar revenue.
ITshares have already undergone a correction beyond the level. Consolidation continues. Avendus Capital CEO Andrew Holland says that it is better to buy IT shares at a time like this. Shares are available at low price and PE ratio.
Statistics show that 60 percent of TCS’s revenue comes from America, while HCL’s 55 percent. As there are fears of economic recession in America and Europe, experts suggest to take a cautious decision regarding the purchase of shares. Meanwhile, export companies like Divi’s Laboratory and Balakrishna Industries have benefited due to the fall of the rupee.
A fall in the rupee will reduce the profits and margins of import-dependent companies. Raw resources have to be spent more. Asian Paints main raw material is crude oil. Dollars are needed to buy it. This company’s rival Berger Paints has the same problem. Tata Steel, JSW Steel, Pdlight Industries, Astral and Supreme Industries companies will also be affected.
Disclaimer: This news is for informational purposes only! Investments in mutual funds, stock market and shares are subject to ups and downs. Returns will vary depending on market conditions. ABP country is not telling you to invest in a particular fund or stock. It is important to check all the details before investing. It is advisable to take advice from certified financial advisors if necessary.
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