Effect of falling rupee on IT sector

The cover story published in the previous issue decently sums up the Q4FY22 results’ impact on the equity markets. After going through the sectoral earnings report, I am keen to know the implications of falling rupee on the IT sector. Can you please throw some light on the same?
- Pratiksha G

Editor Responds: Thank you for your appreciation about the article. Indian rupee has slipped to an all-time low recently against the dollar in tracking persistent foreign fund outflows and elevated global crude oil prices. A falling rupee is sensed to be a positive event for India’s technology services’ providers especially those that are struggling with weak margins. In the short term, rupee weakening is expected to result in margin benefits. Also, Indian IT companies are likely to focus more on exports and a weaker rupee reduces the services’ cost for global clients. We hope we have answered your query. Keep writing to us!