Indian rupee’s misfortune shot in arm for BPO industry It’s time for some cheer in India’s $18-billion business process outsourcing (BPO) industry with the depreciating Indian rupee providing a much-needed breather to the export-driven BPO firms whose diminishing cost arbitrage had impacted margins in the last several quarters. India-based BPO companies with maximum exposure in the US are expected to lead the party unlike its peers who have large near-shore presence and incur significant chunk of their cost in dollars and pounds. Industry experts point out that BPO firms are likely to see a favourable impact in their profitability during the April-June quarter. However, the impact might be limited as most of the currency fluctuation happened in June. A positive impact of 10-15 bps is expected in the quarterly results. “The likes of EXL Services and WNS, which are primarily India-based, are favourably impacted by this. However, the likes of Genpact, which have multiple near-shore centres in the UK, Czech Republic and other places in Europe, will not reap the benefits as a significant part of their costs are in dollars and pounds,” Pradeep Udhas, partner and head (IT-ITes), KPMG India, told FE, adding that BPO firms focused on the Indian market will not be impacted as their costs and revenues are both in rupees.
Posted on: Sat, 24 Aug 2013 07:08:48 +0000
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