Indian IT companies like Cognizant, Infosys play down gains from rupee free fall

A sharp decline in the rupee means Indian IT services exporters are getting more bang for their buck, but most top executives are wary of the sudden dip as it adds to the current uncertainty. The rupee -- Asia's worst-performing currency this year -- has skidded nearly 17 percent from a 2011 high reached in late July as risk-averse investors flee emerging markets. It rebounded as much as 1.7 percent on Wednesday, a day after it touched an all-time low of 52.73. "If the change is gradual we can manage, but if the change happens at the end of the quarter, either way, we will have a big shift. We will not have the time to adjust," Infosys Ltd's Chief Executive S.D. Shibulal said at the Reuters India Investment Summit in Bangalore on Wednesday. Indian IT companies may also not reap the full benefits of a strong dollar as many of them hedge their positions against forex fluctuations. "By the end of September, we had $3 billion hedges in rupee expenses. About 60 percent of our rupee expenses were hedged," a Cognizant executive told Reuters. India's biggest listed biotechnology company Biocon , which receives licensing revenue from its partners Mylan and Pfizer, is not upbeat on the falling rupee either, as gains will be offset by imports getting dearer. "The Reserve Bank of India and the regulators have to rein in the free falling rupee because if you don't do that your imports are just going to cripple the economy," Biocon founder and Chairman Kiran Mazumdar-Shaw said. The rapidly falling rupee is also putting pressure on sectors like autos, infrastructure and realty at a time when high interest rates have already made borrowing more expensive.