Living with a rising Re

Indian Inc is learning to cope with the rising rupee. A year back, the exporting community was crying foul terming loss of competitiveness. However, they have learnt to live with a rising rupee.

Yesterday, Business Standard carried a detailed impact analysis of the rising on various sectors. Here are a few more:

Pharmaceuticals

The impact of the rising rupee on the Rs 25,000 crore pharmaceutical sector has been cushioned to a great extent as the sector has extensively taken forward cover. This assumes importance as a large part of the sector's turnover comes from exports.

Analysts say that net profits will decline by 1- 1.5 per cent for every percentage point rise in the rupee. This can be capped to a large extent by taking forward cover.

Despite the rising rupee, pharmaceuticals companies are clearly keen on continuing the export push as the volume growth push income despite a stronger local currency.

Habil F Khorakiwala, chairman & managing director of Wockhardt, said: "I don't think anything will change for Wockhardt or companies like ours that are committed to globalisation. Our exports are not linked to the prospects of rupee depreciation. If the rupee has appreciated vis-a-vis the dollar, it has depreciated vis-a-vis the pound and euro. One balances out the other."

Cement

The cement industry has not been significantly affected by the rising rupee.

Although imports of coal for cement companies should have become dearer due to the steep jump in freight rates, the rising rupee has partly offset any rise in the import bill of cement companies.

Meanwhile, export realisations have gone up by 20 per cent in the last six months. Therefore, the rupee appreciation has not impacted cement and clinker exports significantly, cement industry analysts point out.

Fast moving consumer goods

The impact of the rising rupee on fast moving consumer goods sector has been mixed. The sector largely imports raw materials such as chemicals and oil and exports finished products.

The benefit of appreciating rupee on imports is negated by lower realisations on exports, analysts say. On the other hand, the Indian consumer benefits, as costs of a host of imported goods will be cheaper.