Forex Loss Companies can rally due to rupee appreciation - Microsec

The INR has appreciated against the USD and other major global currencies as the Indian Cabinet has taken number of policy decisions on FDI and other reforms which is likely to see capital flows in the country. In the past 1 year number of companies have suffered because of the depreciating INR merely on their foreign borrowings. Such companies are likely to see reversal of such losses if INR continues to appreciate.

Since the Rupee has started to appreciate from the level of INR57 to INR52/USD in a very short span of time, a possible trading rally can be seen in the counters like Ranbaxy, Essar Oil, JSW Steel, Tata Motors, JSW Energy, Aurobindo Pharma, Lanco Infratech, Jubilant Life Science, Alok Industries, HEG, SRF, India Glycols, Sintex Ind, Educomp etc. as these companies have earlier suffered from high forex loss due to rupee depreciation. Now if the Rupee appreciates further and maintain at the lower level in the range of 50-52, these companies can benefit as the forex loss or loss on forex loan will be minimal and in some can result in forex gain also.

However these scripts should be bought only considering it as a trading strategy and not the investment.

Source : Equity Bulls

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