KPIT Cummins MTM loss in forex deals at Rs 89.2 cr
KPIT Cummins Infosystems, which derives 98 per cent of its income in foreign currencies, has reported that due to strengthening of the euro vis-a-vis US dollar, its marked to market loss stands at Rs 89.2 crore as on March 31.
By INDIATIMES NEWS NETWORK |
MUMBAI: KPIT Cummins Infosystems, which derives 98 per cent of its income in foreign currencies, has reported that due to strengthening of the euro vis-a-vis US dollar, its marked to market loss stands at Rs 89.2 crore as on March 31.
Since the company has not cancelled the contracts as of March 31, 2008, this will considered as non-cash or notional loss.
During the year ended March 31, apart from forward contracts, the company entered into forex derivative transactions to the tune of $ 42.6 million covering a period of next five years.
"KPIT Cummins��� current and future exports in euros, based on the current sales trends, indicate that the net inflows to the company in euros is higher than the amount on which the premium is payable on the contracts mentioned above. The company therefore believes that it would not incur a loss by virtue of these contracts, although there could be an opportunity loss, the company has made its cost structure compatible with the bench-mark Euro-dollar rates,��� the company said in an announcement to the exchanges.
S B Pandit, Chairman and Group CEO, KPIT Cummins, said, ���Owing to our strong presence and growth in Europe, we have a natural hedge to tide over these contracts. We have a strong pipeline to sustain our growth momentum and attain position of leadership in our focus industries."
Shares of KPIT Cummins plunged down 12.53 per cent to 93.40 on the BSE. Volume surged to 6,52,726 shares against two-week average of 2,31,557 shares. It touched a high of Rs 108 and low of Rs 89.65.
Since the company has not cancelled the contracts as of March 31, 2008, this will considered as non-cash or notional loss.
During the year ended March 31, apart from forward contracts, the company entered into forex derivative transactions to the tune of $ 42.6 million covering a period of next five years.
"KPIT Cummins��� current and future exports in euros, based on the current sales trends, indicate that the net inflows to the company in euros is higher than the amount on which the premium is payable on the contracts mentioned above. The company therefore believes that it would not incur a loss by virtue of these contracts, although there could be an opportunity loss, the company has made its cost structure compatible with the bench-mark Euro-dollar rates,��� the company said in an announcement to the exchanges.
S B Pandit, Chairman and Group CEO, KPIT Cummins, said, ���Owing to our strong presence and growth in Europe, we have a natural hedge to tide over these contracts. We have a strong pipeline to sustain our growth momentum and attain position of leadership in our focus industries."
Shares of KPIT Cummins plunged down 12.53 per cent to 93.40 on the BSE. Volume surged to 6,52,726 shares against two-week average of 2,31,557 shares. It touched a high of Rs 108 and low of Rs 89.65.
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