Software industry association Nasscom today said profitability of IT companies will be affected by the recent rupee appreciation and needs to be checked in time.
"Its is a case of too much too quick. An 8-9 per cent rise in the value of rupee is definitely a cause of concern. The impact will be felt on the bottomline of IT firms," Nasscom Chairman Kiran Karnik said here.
The topline, however, would continue to be strong since margins are still higher, he added.
The rupee has appreciated about 8 per cent against dollar this year.
Karnik said the industry is ready for small appreciation like 1-2 per cent in the rupee but the kind of increase witnessed in the last few months is certainly very harmful for small IT companies.
Asked if this would anyway affect the overall growth guidance, he said Nasscom is yet to release its growth guidance for 2007-08 and "we hope dollar would stabilise to a higher level in the near future."
(Source: PTI News)
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