IT cos to report higher margins on weak rupee

India's top software exporters can be expected to report a jump in margins, aided by a weak rupee, while eyeing out revenue growth to meet expectations in an uncertain business environment.

For Tata Consultancy Services, Infosys, Wipro and HCL Technologies, which all turn in their earnings report cards for the September-December quarter this month, the mini currency bonanza will provide some short-lived cheer before they redouble efforts to win orders, possibly triggering a price war.

The rupee, the worst-performing Asian currency, has fallen more than 15% against the dollar, and this is expected to result in a margin boost of up to 300 basis points. Revenue growth for the top four IT services providers in sequential terms is expected to be within the projected range of 3-5%.

"We would have been happier if we had pure business reasons to cheer about, but for now, the rupee is the White Knight," the chief executive of a large software company said. He spoke on condition of anonymity because his company is in the mandatory 'silent period' ahead of the announcement of results. "With pressures of wage hikes and no clear improvement in rates, it could have been a lot worse otherwise," he added.

In addition to an uncertain business climate, software exporters are also being delivered pinpricks by the US government. Companies are finding that it is becoming tougher to send professionals on projects to the US because the country is issuing far fewer work permits than earlier while making the process cumbersome.

Among the top-tier firms, Infosys has been most vocal about the environment for doing business, saying clients are delaying decisions.

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