Wednesday, February 11, 2015

Indian Software industry and currency risk?

National Association of Software and Services Companies (Nasscom) has reportedly lowered its estimates for IT and back-office services exports to 12-14 per cent for the year ending March 31, 2016, as against the 13-15 per cent estimated for 2014-15.
(http://www.thehindubusinessline.com/features/smartbuy/tech-news/it-exports-seen-stumbling-on-geopolitical-forex-challenges/article6879293.ece?homepage=true)

While aggregate industry revenues for FY2015 are estimated at USD 146 billion, the export market is estimated at USD 100 billion,. With global slowdown and the economic upheaval in Europe and a declining euro, it may not be so good for IT companies having exposure to Europe and those who have invoiced in euro.

Indian companies who have not hedged foreign exchange receivables may be strained. Banks have to monitor  client receivables to avoid NPAs. 


Without any risk or responsibility


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