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Economic Times
12 minutes ago
- Economic Times
Dollar's slide may help IT add 70–300 basis points to Q1 revenues
ETtech Currency is set to overshadow volumes as growth drivers in the June-quarter toplines at Indian tech powerhouses, with a falling dollar giving the anticipated tepid sales some much-needed ballast amid an evident revenue slack in the industry's traditional money spinners either side of the Atlantic.A retreat for the dollar, which gives the rupee a tailwind, should boost Indian tech revenues by 70-300 basis points in the June quarter, analysts said. One basis point is a hundredth of a percentage point. The currency impact cited above, therefore, should expand revenues by 0.7 to 3 percentage the April-June quarter, most major currencies have appreciated on average versus the US Dollar (USD). For instance, the Indian Rupee (INR) appreciated 1%, the Pound Sterling (GBP) 6.2%, the Euro (EUR) 8%, the Australian Dollar (AUD) 2.6% and the Japanese Yen (JPY) grew 5.5%. A weak dollar against a basket of currencies will lead to 100-200 bps of on-quarter cross-currency tailwinds, Motilal Oswal said in a report. HSBC Global Research estimates the impact to range between 80-450 basis points. These movements are higher for companies with greater exposure to EUR, GBP and JPY such as Tata Consultancy Services (TCS), HCL Technologies, Coforge, KPIT, data from Kotak Institutional Equities showed. Currency movements are crucial because Indian IT firms earn a large share of their revenues in foreign currencies but spend in INR -- most of it on employee wages in India. Typically, a stronger dollar helps gain more revenues as most IT majors' over 40-50% revenue comes from the US. However, when the dollar weakens against other currencies such as GBP, EUR, or JPY, revenues earned in those regions helps boost the reported toplines in instance, India's largest software service provider, TCS, has the least dollar dependency among tier-1 companies and derives 50% of its revenues from non-USD currencies. It is expected to net a 211 basis points revenue upside in the second quarter of the ongoing fiscal. The maximum positive impact could be recorded by mid-sized firm KPIT at 299 basis points because it derives a substantial 72% of its revenues from non-USD markets, data by Kotak Institutional Equities showed."During the quarter, the Indian rupee has appreciated around 1% against the dollar which typically is not beneficial for exporters,' said Sumit Pokharna, IT analyst with Kotak Securities. 'However, the rupee has depreciated against other currencies in the 2.5-8% range. This is providing tailwinds for software services exporters on the US$ revenue growth from the previous quarter.'He added that tighter controls by companies on travel costs and hikes and some pulling back on compensation, will aid margins stability for large IT companies while expansion for select mid IT at a time when discretionary spending remains muted, and deal closure timelines are elongated, the exposure to other currencies is helping IT firms, Pokharna the flip side, companies like Persistent Systems and Mphasis, which have among the highest exposure to the US at 85% and 82%, respectively, the sequential benefit of the currency movement will be contained at 69 basis points and 75 basis points, respectively. Elevate your knowledge and leadership skills at a cost cheaper than your daily tea. Markets need to see more than profits from Oyo Can Grasim's anti-competition charge against Asian Paints stand amid intense war Engine fuel switches or something else? One month on, still no word on what crashed AI 171 Delhivery survived the Meesho curveball. Can it keep on delivering profits? Stock Radar: Page Industries breaks out from Cup & Handle formation; stock hits fresh 52-week high For risk-takers with ability to stay invested for the long term: 5 small-caps from different sectors with upside potential of 5 to 32% Multibagger or IBC - Part 14: This auto ancillary with double-digit net margins is now getting EV-focused These mid-cap stocks with 'Strong Buy' & 'Buy' recos can rally over 25%, according to analysts
Hans India
22 minutes ago
- Hans India
Indian-origin Sabih Khan becomes COO at Apple
Cupertino (California): Apple has announced that Sabih Khan, an Indian-origin executive with 30 years of experience at the tech giant, will be its new Chief Operating Officer (COO). Khan will take over from Jeff Williams, who is stepping down from the role this month and will retire later this year. The leadership change comes at a time when Apple is facing challenges, such as slowing iPhone sales and tariff issues. Jeff Williams, who has been with Apple for more than 27 years, will continue to lead the company's design team and health projects until his that, Apple's design team will report directly to CEO Tim Cook. Cook praised Williams for his remarkable work, calling him a key figure in Apple's success. He credited Williams for building one of the best supply chains in the world, launching the Apple Watch, shaping the company's health strategy, and leading the design team with passion and commitment. Sabih Khan joined Apple in 2019 as Senior Vice-President of Operations. He has played an important role in managing the company's global supply chain and overseeing procurement and manufacturing. As the new COO, Khan will report to Tim Cook and is expected to take on more responsibilities, including overseeing AppleCare. Cook spoke highly of Khan, saying, 'Sabih is a brilliant strategist and a key architect of Apple's supply chain. He has helped introduce advanced manufacturing technologies, expanded Apple's production in the United States, and made the company more flexible in handling global challenges.'
Hans India
22 minutes ago
- Hans India
IT, oil stocks drag indices slip into red zone
Mumbai:Stock markets closed lower on Wednesday due to selling in IT and oil & gas shares as investors turned cautious ahead of the start of earnings season and mixed global trends. Dragged by late selling, the 30-share BSE Sensex fell by 176.43 points or 0.21 per cent to settle at 83,536.08. During the day, it lost 330.23 points or 0.39 per cent to 83,382.28. The 50-share NSE Nifty declined 46.40 points or 0.18 per cent to end at 25,476.10. From the Sensex firms, HCL Tech, Tata Steel, Tech Mahindra, Reliance Industries, Bharat Electronics and ICICI Bank were among the laggards. Bajaj Finance, Hindustan Unilever, UltraTech Cement and Power Grid were among the gainers. 'Indian key indices remained largely range-bound, while domestic consumption themes continued to anchor investor sentiment. Despite global trade tensions and commodity tariffs, investor focus is increasingly shifting toward domestic earnings and structural growth drivers, including a likely sequential recovery in urban demand and a pickup in infrastructure-led spending,' Vinod Nair, Head of Research, Geojit Investments Limited, said. The US has extended the suspension of its April 2 reciprocal tariffs until August 1. Shares of mining giant Vedanta dropped 3.38 per cent to end at Rs 440.80 on the BSE after US short seller Viceroy Research released a report charging billionaire Anil Agarwal's mining conglomerate to be 'financially unsustainable' and posing a severe risk to creditors. Viceroy said it was shorting the debt stack of Vedanta Resources, the parent company and majority owner of Mumbai-listed Vedanta Ltd, as it released the 85-page report. Responding to the report, Vedanta in a statement said, 'The report is a malicious combination of selective misinformation and baseless allegations to discredit the Group'. 'Markets traded in a volatile but in a narrow range and ended marginally lower, extending the ongoing consolidation phase. While the tariff-related concerns linger, the focus now shifts to the earnings season, with IT major, TCS, scheduled to announce its results on Thursday, July 10,' Ajit Mishra – SVP, Research, Religare Broking Ltd, said. The BSE SmallCap gauge climbed 0.45 per cent while midcap index dipped 0.05 per cent. Among BSE sectoral indices, oil & gas dropped the most by 1.41 per cent. Metal (1.41 per cent), realty (1.40 per cent), BSE Focused IT (0.80 per cent), teck (0.71 per cent) and IT (0.67 per cent) were among the losers. FMCG, auto, consumer durables, services, consumer discretionary and dinancial services were the gainers.
