The rupee seems to have started appreciating against the dollar ( or to be correct – the dollar is depreciating against the rupee ).
There seems to be a consensus that dollar would continue to lose value for some time ( i have no way of figuring it out as i am clueless on how to evaluate currencies , but going by warren buffets 20 B bet , i would not bet against it )
So how do various companies get impacted ?
I would assume industries like paints / oil and gas / and others using petroluem as a key raw material to benefit substaintially and could see either margin expansion or atleast less pressure on margins (with toplines being robust due to strong domestic demand )
On the other hand export companies – esp IT companies would face a tough time. My own view is a long term appreciation should impact the labor arbitrage on which a lot of these companies thrive. The weaker ones could definitely go out of business ( Their costs are rupees and Topline in dollars )
Pharma / Auto companies have stronger IPR / R&D assets and those with higher value addition may be able to hold their pricing or atleast reduce the impact on margins ( auto components could actually hedge by importing steel and other raw material )
All in all , for the country it could mean lower supply side inflation. But expect an impact on the business model of various industries which thrive on the exchange rate
