The Hindu Business Line : Rising rupee helps some companies shore up profits

New Delhi, Oct 28 While the rising rupee continues to pinch exporters and sections of the domestic manufacturing sector, a host of other firms are taking advantage of the strengthening domestic currency and raking in the moolah.

Transmission major Power Grid Corporation of India Ltd’s net profit for the first quarter of the current fiscal was boosted nearly 44 per cent on account of a reduction in interest and finance charges on foreign currency loans, a company official said. As on June 30, the favourable exchange rate of the rupee vis-À-vis the dollar, Swiss franc and other currencies translated into a reduction of Rs 198.34 crore in interest and finance charges. As on June 30, PGCIL had Rs 6,059.69 crore equivalent of foreign currency borrowings outstanding.

Tata Steel, for the second quarter of the current fiscal, reported forex gains of Rs 90.31 crore from unrealised exchange difference on foreign currency borrowings, partly offsetting its rising interest costs.

Software services firm iGATE Global Solutions incurred a lower interest expense of Rs 65 lakh during the first quarter of the current fiscal, compared to Rs 68 lakh in the corresponding period last year, on an unsecured foreign currency loan of $11 million from holding company iGATE Corporation.

Chemicals firm Jubilant Organosys Ltd reported a doubling of consolidated second quarterly net profit this fiscal, with the company’s foreign currency loans acting as a hedge against the appreciating rupee in the quarter, resulting in a gain of Rs 28.9 crore.

According to analysts, gas distributors such as Gujarat Gas will derive currency gains from dollar-denominated gas procurement prices.

For the $15-billion gems and jewellery sector, which is a key export segment, raw materials are cheaper with the strong rupee. The sector eyes 8-10 per cent growth this year.