Financial Daily from THE HINDU group of publications
Thursday, Jun 01, 2006
Financial Daily from THE HINDU group of publications Thursday, Jun 01, 2006 |
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Info-Tech
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Interview `Satyam OPM rises 30 bps with every 1 pc fall in rupee'
The Chief Finance Officer at Satyam Computer Services, Mr Srinivas Vadlamani, says that every 1 per cent depreciation in rupee increases their operating profit margin by 30 bps. Excerpts from CNBC-TV18's exclusive interview with Mr Srinivas Vadlamani: What have you gained in terms of the rupee and where it might end this year with and how have you hedged yourself? As an exporter, we have gained because of the rupee depreciation. Today we hedged roughly around $250 million, which represents 50 per cent of our next 12 months dollar inflows, so that is a dampener. On an average last quarter to this quarter, the depreciation is around 1.5 per cent or so. Every 1 per cent depreciation in rupee increases our operating margins by 30 bps. We are in a `wait and watch' mode. This 46.50 target for rupee should have been reached at in another three more months, as per our experts. But it reached at such a fast rate that no one even anticipated this. Would you want to be less aggressive on the hedges now ? I agree we will not change our policy. So we continue to stick to our policy of covering 50 per cent of our expected dollar inflows in the next 12 months.
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