In addition to a fast-growing market, in terms of exchange rates too, the euro has been strengthening with respect to the rupee while the dollar has been weakening. This means Indian products become cheaper in the European market while they become more expensive in America.

When the rupee weakens in terms of the euro, it implies a higher revenue for the company. The weakening dollar has had an impact on the margins of IT companies. For instance, in the third quarter, every percentage point appreciation of the rupee had a negative impact of 35 basis points on HCL’s margins. The depreciation of the rupee against the euro had a positive impact of 13 basis points. “For us, Europe is growing faster than the US,” said V Balakrishnan, CFO of Infosys.