On 14th August, a day before India’s 72nd Independence day, the national currency fell to an all time low against US dollar standing at the 70 Rs mark. However, the currency managed to recover from major losses with closing at a marginally higher point. This fall in price is actually more of the technical nature that shall actually be viewed with respect to the global happenings.
The Indian Rupee saw its all time low at 70 not because of crude oil volatility or the Chinese Yuan price downfall. The major decline in the value came due to Lira’s one-sided fall which came down by 40 percent. Since the start of 2018, Rupee has been performing the worst with 8.8 percent fall as compared to 7.2 percent fall of Indonesian Rupiah. Comparatively, Philippine Peso and Yuan performed much better with 6.6 percent and 5.5 percent fall respectively.
The change in Indian Rupee value has brought major changes for a lot of stocks with some going to the positive side while some towards the negative. For Persistent Systems, the fall in the value is set to bring a positive impact given the fact that the company brings in about 83 percent of the total revenue from the United States.
Another firm to receive the benefits of positive impacts from the downfall of Rupee is the Sun Pharma Ltd. for its stock as the company’s 35 percent revenue comes from the US. Apart from that, another major benefit maker from this decline in Rupee value is the company Suven Lifescience that generates 85% of its overall revenue from the global sales. The increased number for clinical projects to be seen in the Phase-1 shall guarantee the improvement for Phase-II as well as Phase-III in the course of 2 to 3 years.
While all these companies benefit from the fall in Rupee’s value, the company to see a negative impact from this decline includes names such as InterGlobe Aviation, Adani Ports, HPCL, BPCL, etc. Additionally, companies such as Bharti Airtel, Reliance Communication, and Tata Steel hold foreign debts and given the fall of the local currency, financing costs are sure to increase with a major impact over profit margin for the company. The IT companies like Infosys and TCS shall see an increase in profitability with all the major contracts coming from US based business holders.