Never expected huge depreciation of rupee: Atul Nishar, Hexaware Tech

In an interview with ET Now, Atul Nishar, Chairman, Hexaware Technologies Ltd, talks about the rupee fall. Excerpts:

ET Now: What happens next? I guess it is very difficult to predict where the rupee stems or where the fall stops, but what does this do to financials in the near term because I do not think the largest of the companies would have expected the kind of sudden movement in the rupee that we have seen in the last one month?

Atul Nishar: Yeah. That’s right. If you see just less than four months back, rupee had touched 43.85. From that level, now at 52.5 or whatever, it is more than 20% depreciation. So clearly none of us had expected that. But in our software business, we sign contracts for longer periods and it is important to have predictability of revenue and, therefore, most of us follow a policy of hedging for a period of time. The policy will vary from company to company, but we do hedge for a period of time.

ET Now: How much are you hedged right now?

Atul Nishar: We at Hexaware follow a policy of hedging about 80% in the first year next four quarters and about 50% for the following four quarters. So our current average rate is 48, but that does not mean we will incur any loss at net level because our operating profit will go up. And our net profit will remain pegged at 48 to the extent of 80% of the inflow and the balance will get upside.

ET Now: Are you looking at revising the hedge price at all at this juncture given the fall in the currency?

Atul Nishar: Yes, that’s right. Actually this is an opportunity to increase the hedges and we would increase maybe even as percentage in terms of our policy and keep improving our average rate because if anyone who has belief in the future of India, this is short term. It is an opportunity for exporters.