MUMBAI: The sharp depreciation of the rupee-from around 45 per US dollar level to its current all-time low of 54 in about four months-has put most policy makers, corporates and economists on the back foot as they see it as a huge negative for the country.

However, there are some companies from sectors like software, pharmaceuticals and metals & mining which stand to gain from the sliding rupee.

However, the exceptions from this group are the companies with large foreign debt since their cost of servicing the debt, denominated mostly in dollar, will go up substantially.

Large IT companies, with substantial exports earning but almost no debt on their books, will benefit the most from the weakness of the rupee, a research report by global ratings major Standard & Poor's noted.

"A falling rupee helps companies in the IT sector because they derive more than 85% of their revenues from customers outside India, and most of the inflows are in US dollars. In contrast, only half of the expenses are incurred in foreign currency," the S&P analysts said.

Infosys, TCS and Wipro from the IT sector would benefit the most from rupee's weakness, because of their higher dollar revenues and low foreign debt.

The depreciating rupee would also benefit companies in the metals & mining sector because prices of their products, like copper, lead, aluminium and zinc, are linked to international prices. However, the same is not the case for iron & steel companies. Among the gainers would be Vedanta Resources and Hindalco, while for SAIL and Tata Steel the impact is expected to be neutral to negative.

From the pharma pack, companies which have higher proportion of sales coming from exports and neither have forward covers nor any forex liability, stand to benefit the most from a sliding rupee, a report by domestic brokerage Emkay Global Financial Services pointed out.

Divi's Laboratories is expected to benefit the most from the depreciation of the rupee and Emkay Global estimates a 37% upside in its earnings during the October-March period of the current financial year. The other gainers within this pack are Dr Reddy's Laboratories, Cipla and Sun Pharma, the report noted.


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