Wednesday arrived with a headline that usually signals trouble: the Indian rupee sank to a historic low against the US dollar. For importers, it’s the kind of move that makes balance sheets wince—every dollar purchase suddenly costs more rupees. But in glass-walled campuses across Bengaluru, Pune, Hyderabad, Chennai, and Gurugram, one corner of corporate India had reason to exhale.

India’s $283 billion information technology sector—a global export machine paid largely in foreign currency—tends to benefit when the rupee weakens. The math is simple, almost mechanical: dollars earned abroad convert into more rupees at home, while a large share of costs remain in rupees. The rupee plunged to 90.29 per dollar before closing at 90.19, a 5.4% fall since the start of the fiscal year, and for IT services, that slide can behave like a soft financial tailwind.

Yet, like most things in markets, the real story isn’t just the direction—it’s the texture. Currency gains may lift revenues and margins, but operational realities, cross-currency noise, wage cycles, and the changing nature of tech work decide how much of that benefit actually survives the journey to the bottom line.

A Sector Built on Foreign Paychecks

Indian IT’s Big Five—Tata Consultancy Services (TCS), Infosys, HCL Technologies, Wipro, and Tech Mahindra—are not merely domestic champions. They are export-first businesses whose growth has long depended on global enterprise technology budgets.

A major portion of their work comes from the United States, often more than 40% for many of these firms. That exposure matters because US clients pay in dollars, and when the dollar strengthens against the rupee, the same contract value can translate into higher rupee revenue without the company doing anything differently operationally.

Europe adds another layer. The rupee has also declined sharply against other key currencies—15.47% to ₹120 per pound and 8.32% to ₹105 against the euro since the start of the year. For companies that derive 25% to 33% of revenue from Europe, a weak rupee against the euro and pound can be just as meaningful as a strong dollar.

Even within Europe, the exposure isn’t uniform. TCS reportedly earns 17.5% of revenue from UK clients, giving it a particular sensitivity to pound movements. The other top firms don’t disclose UK revenue separately, which means investors and analysts often infer the impact indirectly via regional reporting and currency commentary.

Why a Weak Rupee Feels Like a “Cushion” Right Now

This currency cheer is arriving during a period when the sector’s fundamentals have felt… heavier.

Indian IT has been growing at one of its slowest clips in decades, squeezed between muted demand and a world where high lending rates have made clients cautious. When money is expensive, discretionary tech spending is often the first to get postponed, resized, or renegotiated. Add the creeping impact of automation tools—which can reduce billing or compress project sizes—and revenue momentum begins to look less like a sprint and more like a steady climb up a gentle incline.

In that context, a depreciating rupee can behave like what one market voice called a “positive cushion”—not a cure, but a buffer. It doesn’t create new demand, but it can make existing demand more valuable in rupee terms, softening the impact of slowdowns elsewhere.

The Scorecard: Growth Has Been Modest

The recent performance of the sector underscores why any tailwind matters.

Only three of the Big Five ended last year with revenue growth—and even then, it was below 5% annually:

• TCS: revenue up 3.78% to $30.18 billion
• Infosys: up 3.85% to $19.28 billion
• HCLTech: up 4.3% to $13.84 billion
• Wipro: revenue down 2.72% to $10.51 billion
• Tech Mahindra: revenue down 0.21% to $6.26 billion

When growth is slim, margin and efficiency narratives become louder. Investors stop asking only “How fast?” and start asking “How durable?” That’s where currency movements can meaningfully shape sentiment.

The Bigger Prize: Profitability (Not Just Revenue)

Revenue translation is the obvious benefit. The more consequential impact, however, is expected on profitability.

One estimate in the market suggests that every 1% decline in the rupee may contribute roughly 10–15 basis points (bps) of margin expansion for IT services firms. And if you tally the rupee’s decline against the dollar, euro, and pound, the “on paper” implication looks dramatic—an at least 420 bps potential boost to sector operating margins.

But “on paper” is where ideal outcomes like to live.

In reality, margins face drag from multiple directions:

• Cross-currency fluctuations (benefits vary by mix of USD/EUR/GBP exposure and hedging)
• Wage hikes (a recurring pressure in talent-heavy services)
• Fewer working days in certain quarters
• Restructuring costs as firms realign teams, offerings, or geographies
• Client-specific expenses that don’t politely disappear because the rupee moved

Still, the underlying structural truth remains: revenues are largely foreign currency, costs are largely rupees. Salaries, office rent, and many operational expenses sit in INR. So when foreign receipts convert at a higher rate, the margin wedge can widen—sometimes noticeably.

Currency Tailwinds: The Companies Already Admit It

This isn’t just analyst theory; it’s something the companies themselves have been highlighting as a driver of margin performance.

At the end of September, the reported margin benefit from the declining rupee was:

• TCS: +80 bps, operating margin 25.2%
• Infosys: +60 bps, operating margin 21%
• HCLTech: +56 bps, operating margin 17.5%
• Tech Mahindra: +40 bps, operating margin 12.1%
• Wipro: operating margin 16.7%, noted a positive currency impact but didn’t quantify it

These numbers matter because they show currency is not a minor footnote; it is a recognized contributor to profitability—especially when growth is moderate and every basis point is fought for.

The Visa Wildcard: When Costs Spike Abroad

There’s another angle where a weaker rupee can help—ironically by offsetting rising costs that are priced in dollars.

Visa expenses are a notable pain point for firms that deploy talent onsite in the US. In this narrative, a sharp policy move lands like a cost bomb: on 19 September, US President Donald Trump reportedly increased visa fees for new applications to $100,000, a ten-fold jump. For Indian IT services companies, that kind of increase threatens margins directly.

In such a scenario, a depreciating rupee doesn’t remove the cost—it can’t. But it can partially offset the impact by improving rupee realizations on foreign revenue, helping firms absorb some of that shock without passing all of it into pricing or delivery changes.

What This Really Means (Beyond the Headlines)

The rupee’s fall is not universally good news—not for importers, not for companies with heavy dollar-denominated liabilities, not for the broader inflation conversation. But for export-driven IT services, it offers a rare kind of relief: a macro event that acts like a financial tailwind without requiring new sales.

Still, the benefit is not automatic or endless. Hedging strategies can smooth gains (and sometimes cap them). Wage cycles can swallow currency advantages. Clients may push harder on pricing. Automation may reduce billable headcount. And demand, ultimately, is the boss.

But in a season of tight spending and slower growth, the weak rupee gives Indian IT something valuable: breathing room—the ability to protect margins, steady guidance, and navigate cost shocks like visas with slightly more cushion than they’d otherwise have.

Takeaways: The Rupee’s Drop, Interpreted Like an IT CFO

• Exporters win, importers pay more. IT services sit firmly in the “exporters win” camp.
• More foreign currency exposure = more benefit. US, eurozone, and UK revenues convert into higher rupee earnings when the rupee weakens.
• Margins matter more than ever. With growth below 5% for most leaders, profitability becomes the battleground.
• The benefit is real but not pure. Cross-currency swings, wage hikes, and one-off costs can dilute the headline advantage.
• Currency tailwinds can soften policy shocks. Rising visa costs and other dollar-priced expenses can be partially offset.

If the rupee’s slide is a storm, India’s IT giants are the kind of ships designed to catch its wind—even if the waters of global demand remain choppy.

Feel free to share your experiences and insights in the comments below. Let’s continue the conversation and grow together as a community of traders and analysts.

By sharing this experience and insights, I hope to contribute to the collective knowledge of our professional community, encouraging a culture of strategic thinking and informed decision-making.

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