Software industry body Nasscom on Thursday said the currency volatility will impact companies deriving revenue from Europe, but is unlikely to directly impact its 12-14 per cent revenue growth forecast for the fiscal.

“Companies that have greater exposure in Europe, where the currency is going through a bit of decline, and in sectors like telecom, oil, or energy, are ones for which the impact will be slightly more,” Nasscom President R Chandrashekhar said.

The $150-billion domestic software companies net around 20 per cent of their revenue from Europe, and over 70 per cent from North America.

He further said that companies serving American clients would benefit from the strengthening dollar, but this might only be in the short-term.

Chandrashekhar, however, added that the ongoing foreign exchange trouble will not hurt Nasscom’s annual revenue growth target directly, though there could be an indirect impact by way of reduced IT spends by clients.

“Currency volatility impacts are only indirect, not direct. The Chinese economic crisis and its impact on the global economy as well as on prices of commodities, fuel, oil etc, could have an impact of IT spending on those sectors, and therefore indirect impacts could be there,” Chandrashekhar said.

Over the last fortnight, there has been heavy volatility in global financial markets due to worries from China. This has seen the dollar strengthening against all major currencies.

The rupee has also lost ground against the dollar, but has gained against the euro, which has led to these fears.

Policymakers have been stressing that we are placed better among emerging market peers. “As an industry, we believe that volatility is not good and stability of the currency makes it easier for the industry,” Chandrashekhar said. The RBI has been saying that it intervenes only to check excessive single-way volatility in the market.

Chandrashekhar added that the growth in Internet users is happening faster than expected and companies need to gear themselves up with necessary strategies.

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