Rupee-hit IT firms seek price revision

CHANDIGARH: Hit hard by consistent rise in rupee value against the US dollar, IT firms in Punjab and Chandigarh are demanding price revision from their foreign clients, besides adopting cost management practice to maintain margins.

"We are now asking our foreign clients especially in the US to revise the price by at least 5 to 7 per cent in order to neutralise the adverse impact on our proceeds," IDS Infotech Managing Director Partap Aggarwal said here.

The regular appreciation of rupee against dollar during the past couple of months has hit the top line growth of the companies in the northern region by 9 to 10 per cent. "The profitability of this sector has taken a beating as a direct fallout of depreciating US dollar against rupee," he said.

The Indian currency has risen by about nine per cent since January this year.

According to experts, IT firms in Chandigarh and Punjab have lost almost Rs 40-50 crore on account of the weak US dollar during the past several months.

The companies have also initiated an exercise of cost management in respect of HR services so as to maintain competitiveness and viability. "Since human resources are key input in the IT sector, the companies are also learnt to have started optimising their resources through extra working hours and stopping the practice of hiring temporary people for a while," said an expert.

Nearly 100 IT companies including Dell, IBM, Quark etc are working in Mohali and Chandigarh with an expected annual turnover of Rs 400 to 500 crore. Majority of the companies have their BPO and software development centres in the cities with clients in the US and Europe.