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Karnivesh

Simplifying finance.... • 21h

When I started tracking export focused companies, I used to celebrate every rupee depreciation. A weaker rupee felt like instant good news. Dollar revenues would translate into bigger numbers. I noticed that reported revenue often jumped, but cash flows did not always follow. Digging deeper, I realised why. Most exporters hedge their currency exposure. Parts of their dollar earnings are locked in at older rates. When the rupee moves sharply, hedging costs & accounting adjustments quietly step in. Currency movement can change how performance looks, without changing how the business actually operates. For sectors like IT services, pharma & chemicals, even small FX moves can reshape margins. Sometimes the benefit shows up later. Sometimes it barely shows up at all. What I now pay attention to is constant currency growth, operating discipline, and how thoughtfully management handles FX risk. The rupee may move fast, but business quality moves much slower.

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