Forex losses likely to play spoilsport for TCS

By at 18 April, 2009, 12:27 am

After disappointing numbers from Infosys, analysts and investors are anxiously awaiting the quarter-end figures of the country’s second biggest IT exporter TCS, which will announce its results on Monday. Infosys and TCS numbers often reflect the state of the Indian IT sector.
In the past few quarters, foreign exchange hedging transactions have played an important role in deciding who among the two fared better. To that extent, the two arch rivals share a sort of inverse relationship, which may continue even during the March quarter. Until September ’08 quarter, Infosys was reporting higher forex losses compared to TCS.
This was helping the latter to come out with better numbers. For instance, Infosys reported a forex loss of Rs 45 crore in the March’08 quarter as against Rs 256.6-crore gain for TCS. In the following quarter, the loss widened to Rs 80 crore for Infosys while TCS reported a loss of Rs 75 crore.
However, since September ’08 quarter, forex losses of TCS have risen significantly compared to Infosys. This can be attributed to the difference in forex strategies of the two companies.
Infosys has shifted to short-term forex hedging citing increased volatility in the currency market Further, it is using only range forward options, which limit the risk emanating from high volatility.

TCS, a $6bn co, offers 1:1 bonus MUMBAI: Tata Consultancy Services (TCS), India’s top software service company,...
Google profit up but revenue drops for first time NEW YORK: Google reported a 9.2 per cent rise in...
How TCS is managing costs TCS CEO and managing director S Ramadorai has said that...
Infy CEO sees signs of recovery CHENNAI: The global economic recovery could happen in phases just...
Murthys pledge wealth for social welfare projects BANGALORE: Taking a leaf out of investment moghul Warren Buffett’s...
Advance tax outflow infuses volatility in market Mumbai, Dec. 15 Volatility marked trading on the bourses on...
HP top PC maker in US SEATTLE: Global shipments of personal computers fell 7.1 percent in...
HDFC profit rises 20% HDFC has reported a net profit of Rs 733 crore...
Jobs data may go quarterly The National Statistical Commission (NSC) is actively considering a proposal...
Safe bet: Gold shines with 26% returns MUMBAI: Even as the current economic conditions have dwindled returns...
Market pricing of fuel will not hit people: Deora Oil minister Murli Deora said decontrol or market-driven prices will...
65,000 H-1B visa cap still not exhausted NEW DELHI: The demand for H-1B visas to work in...
1st Test: Play washed out on second day The second day of New Zealand’s opening Test match against...
DLF looking to raise Rs 10,000 cr via asset sale NEW DELHI: DLF, India’s largest real estate company, is looking...
Profit taking drags sensex 337 pts MUMBAI: BSE sensex’s eight-session winning streak came to a sudden...