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Thanks to the continued weakness in the rupee, on the back of the strengthening of the US dollar, the local currency has depreciated around 2% resulting in a mark-to-market forex losses.
The 2.2% drop in local currency during the Q3 was the biggest drop in nine quarters. As a result, many companies reported forex losses between September-December 2024, with InterGlobe Aviation witnessing the biggest loss of ₹1456 crore.
Profitability was adversely impacted by rupee depreciation during the period, said Gaurav M Negi, Chief Financial Officer of InterGlobe Aviation post Q3 earnings. “Our exposure to foreign exchange risk is largely due to significant portion of our lease liability and maintenance obligations that are denominated in US dollars,” Negi added.
Also read: Zydus Lifesciences Q3 Results: US formulation sales near $300 million, forex gains aid profit
On Wednesday (February 5), the rupee hit yet another low of 87.50 against the dollar. However, InterGlobe Aviation has taken steps to mitigate such losses in the coming quarters by hedging part of its foreign currency outflow. The step has already yielding the result with the company reporting a gain of ₹59 crore in the current quarter. Additionally, it expects natural hedges to improve going forward as the airline adds more international capacity.
While Adani Green Energy reported a forex loss of ₹307 crore in Q3 FY25, the forex loss of Adani Enterprises stood at ₹296 crore during the same period. Other companies that reported losses on foreign exchange include UPL (₹206 crore), Sun Pharmaceutical Industries (₹183 crore) and JSW Infrastructure (₹159 crore), among others.
Interestingly, both Adani Enterprises and Sun Pharmaceutical had reported forex gains of ₹72 crore and ₹128 crore, respectively, in the previous three months.
However, there are some outliers. Zydus Lifesciences is one of them. The Ahmedabad-headquartered generic drugs manufacturer reported forex gains of ₹183 crore in Q3FY25, which is a four-fold increase from the September quarter forex gain of ₹45 crore. The gain in foreign currency is likely to stay due to strengthening dollar and this is pure business gain and not a one-off, the company said in an analysts call after the Q3 results.
