The rupee has fallen sharply against the dollar following a depreciation of the Yuan by the authorities in China. This had a telling effect on the Indian currency which also fell sharply. The Indian rupee dropped to its lowest level since Sept 2013 and is now trading at 64.77 to the dollar.
Infosys derives most of its revenues from the US. The shares saw a sharp rally of 2 per cent on Wednesday following a depreciation in the rupee. Should the rupee continue to fall we could see Infosys shares continuing to gain momentum.
The company recently reported a good set of numbers for the quarter ending June 30, 2015. The shares of Infosys recently have been upgraded by a host of brokerages.
In fact, Infosys' dollar revenues were a huge $ 2,256 million for the quarter ended June 30, 2015, and will benefit from a falling rupee. A slight decline in the rupee against the dollar can benefit the company immensely.
Sun Pharma also derived a bulk of its revenues from exports. The company recently reported results that did not match expectations. However, the stock has rallied thanks to a sharp fall in the rupee.
Should the rupee continue to fall it could benefit a player like Sun Pharma, which gets almost 70-75 per cent of its revenues by exporting.
Tata Consultancy Services (TCS) is among the top exporters of software services in India. The company also like peers Infosys is among the top beneficiaries of a fall in the value of the rupee.
The performance of the company for the quarter ending June 30, 2015 was not very great, but a fall in the value of the rupee against the dollar would certainly benefit the company, since a substantial amount of its revenues is generated in dollars. USD Revenues of the company in 2014-15 was a huge $15.5 billion.
However, if the rupee strengthens we may see an adverse impact on the share prices, since they have already run-up.