Sunday, September 30, 2007

Rising rupee hurting LPO companies

A snippet from a Business Standard piece mentioning the hit in margins for LPO companies due to an appreciating rupee:

Tricom, however, has not been immune to the rupee appreciation thus far. Its operating profit margin, which was at over 51 per cent in FY07 and 48 per cent in the first quarter of FY07, shrunk to around 41 per cent in the first quarter of FY08 as the company made an exchange loss of nearly Rs 0.8 crore.

Sify Finance has a similar piece quoting Pangea3:
Sanjay Kamlani, co-CEO of legal outsourcing services firm Pangea3, said that his company was looking at incorporating clauses in new contracts, which would allow it to engage clients in future discussion on pricing in case the currency continued to rise.

Being a big enough business which gets affected by relative movements of currency may be a good problem to have, than not having the business at all!