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1Repair Windows errors before they cause bigger problems2Scan for outdated or missing drivers - takes under a minute3Clear out junk files and repair common Windows errorsCurrency movements can change the rupee value of Indian IT services companies’ revenue, costs, assets and liabilities. A weaker rupee often supports reported revenue and may help operating margins when foreign-currency inflows exceed foreign-currency outflows after hedging. But the effect varies by company, currency mix, timing and accounting treatment: rupee depreciation is not an automatic profit boost.
How exchange rates reach company results
Indian IT services companies commonly bill clients in currencies such as the U.S. dollar, euro, pound and Australian dollar, while paying costs in rupees and foreign currencies. When foreign-currency revenue is converted into rupees for reporting, a weaker rupee can increase its reported rupee value even if the amount billed in foreign currency has not changed. A stronger rupee can reduce that value.
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The same conversion applies to costs. The relevant exposure is the net of currency-linked inflows and outflows, after considering hedges and timing—not simply the company’s dollar revenue. Local-currency expenses in overseas markets, foreign-currency expenses, and the operating currencies of subsidiaries all affect the result. Infosys says substantially all its revenue is generated in foreign currencies and identifies significant expenses in U.S. dollars and rupees; Wipro describes exposures spanning revenue, receivables, cash, forecast cash flows, payables and foreign-currency borrowing. Infosys FY2025 Form 20-F; Wipro FY2025 Form 20-F.
Why a weaker rupee can help—but not always
Infosys says depreciation of the rupee against the U.S. dollar or other currencies affects its margins positively, while appreciation affects them negatively. That is the company’s description of its exposure, not a guarantee for every Indian IT provider. If foreign-currency costs rise alongside receipts, or if the company has different exposures or hedges, the net benefit may be smaller, delayed or different in direction. Currencies also do not necessarily move together: dollar–rupee changes alone do not describe movements in the euro, pound, Australian dollar or other currencies.
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Reported growth versus constant-currency growth
Reported revenue retains the effect of converting foreign-currency results at the exchange rates used for the reporting period. Constant-currency growth attempts to remove exchange-rate movements from the comparison, helping readers assess underlying business growth. It does not replace reported revenue or cash flows, and it does not, by itself, show realized hedge results or every currency-related accounting gain or loss.
Read the company’s stated method and reporting period when comparing the two measures. TCS presents revenue and constant-currency growth together on its investor-relations results page. For FY2025–26, it reported revenue of $30 billion and constant-currency growth of −2.4% year over year. These are TCS figures for that fiscal year, not a sector-wide currency sensitivity. TCS Investor Relations.
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Hedges can change the net effect, not eliminate currency risk
Companies may use foreign-exchange forwards and options to offset some forecast receipts, payables or other exposures. A hedge can reduce the impact of an exchange-rate move, but its amount and timing may not match the underlying exposure exactly. Infosys says its hedging instruments may not be adequate to insulate it from currency risk. Derivative gains or losses may also appear in a different period or financial-statement line from the operating revenue or expense they relate to.
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Random freezes, missing sound and display glitches usually trace back to one bad driver. Find and replace yours safely.Free scan · under a minuteFor that reason, a reported margin change should not automatically be attributed to spot exchange rates. Demand, pricing, utilization, wage costs, delivery mix and subcontracting can also influence operating performance.
Currency effects in the accounts
Currency can affect results through operating conversion, remeasurement of monetary balances, translation of foreign subsidiaries, and gains or losses on hedging instruments. These are related but distinct accounting channels.
Infosys’s FY2025–26 consolidated statements illustrate the distinctions. Its Indian entities use the rupee as functional currency, while foreign subsidiaries use their local functional currencies. Foreign-currency monetary assets and liabilities are translated at the balance-sheet-date rate; resulting gains or losses are generally recognized in profit and loss unless deferred in other comprehensive income as qualifying cash-flow hedges. Revenue, expense and cash-flow transactions are translated at transaction-date rates. Foreign subsidiaries’ assets and liabilities use closing rates, while revenue, expense and cash-flow items use average rates; resulting translation differences are included in currency translation reserves. The company also separately lists exchange gains or losses on forwards and options and translation of other assets and liabilities in other income. Other companies may present these effects differently, so check their accounting notes. Infosys Integrated Annual Report 2025–26.
How to read a company’s currency exposure
- Check the revenue and cost mix. Look at the currencies in which the company earns revenue and incurs costs, along with its delivery footprint and local-currency expenses.
- Compare reported with constant-currency growth. Use the company’s own definition and reporting period; do not treat constant-currency growth as a substitute for reported results.
- Read the sensitivity disclosure precisely. Identify the exchange rate tested and whether the disclosed effect applies to revenue, incremental operating margin, total margin or profit.
- Review hedging details. Note instruments, exposure coverage and timing, and look for derivative gains or losses in the financial statements.
- Separate currency from operations and accounting. Consider demand, pricing, utilization and costs, and distinguish operating conversion from balance-sheet remeasurement and subsidiary translation.
What a disclosed sensitivity can—and cannot—tell you
Infosys reported that each one-percentage-point depreciation or appreciation in the rupee–U.S. dollar rate affected incremental operating margins by approximately 0.43% in FY2025. It reported the same approximate sensitivity for FY2024. This is an Infosys-specific disclosure about incremental operating margins for those fiscal years; it is not a forecast or a rule that can be applied to every Indian IT services company. Infosys Integrated Annual Report 2024–25.
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The available company materials do not establish a consistent set of current-year quantified currency sensitivities for TCS, HCLTech, Wipro and Infosys. HCLTech’s official annual-report archive lists its FY2025–26 report, but a comparable peer sensitivity should not be inferred from that listing alone. HCLTech Annual Report archive.
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