Having borrowed through foreign exchange loans in a big way besides having overseas operations, top Indian companies...
Having borrowed through foreign exchange loans in a big way besides having overseas operations, top Indian companies are highly vulnerable to rupee depreciation despite a slight improvement in their sensitivity to the exchange rate, said India Ratings.
The rating agency estimates that a 1% depreciation of the rupee would shave off 0.19% of the absolute EBITDA of 234 companies out of the top 500 listed corporate borrwers. Within these companies, fertiliser companies would see their EBITDA reducing by 2% and consumer durables would also be affected more than any other sector, the rating agency said. Further, the worry escalates as 32 corporates out of these 234 companies will see their operating profits falling by 1-3% for every 1% depreciation of the rupee.
These corporates belong to the metals & mining, fertiliser, textile, sugar, gems & jewellery and IT sector.