New Delhi:  IT giant Infosys, whose operating margins were up 3 percent due to depreciation of rupee against US dollar, on Thursday said the Indian currency is likely to remain volatile and the chances of it depreciating further are higher.

"For the rupee, we assumed it at Rs 52 for the next quarter. We believe that currency will be volatile and the chances of it depreciating are higher," Infosys Member of the Board and Chief Financial Officer V Balakrishnan said.
Bangalore-based Infosys has forecast dollar revenue growth of 16.4 percent for the current financial year, down from 17.1 percent to 19.1 percent projected in October.

The operating margins benefited around 4.4 percent due to depreciation in the rupee. The company had some increase in other cost to the extent of 1.4 percent, so net-net benefit was 3 percent on operating margins, Balakrishnan added.

Despite the global economic uncertainty, Infosys on Thursday posted a better-than-expected 33 percent rise in net profit to Rs 2,372 crore for the third quarter of this fiscal, helped by a weak rupee.

"It (rupee) could appreciate in the short-term but in the long-term it has to depreciate. Secondly, in a volatile global economic environment, India is seen as an emerging market risk to that extent, the inflows could be lower.

"Thirdly, India's growth story itself gets impacted because of the paralysed political system we have today. So if we put all that together, the chances of rupee depreciating are higher," he said.

The company said that in fact, the regulator (RBI) had taken some steps on the derivative front, on opening up the debt market front - that would help get some inflows. So one is witnessing some short-term appreciation, but if a medium-term view is taken, the rupee could depreciate further.

"...So our hedging position today is around USD 877 million. We normally hedge for two quarters. If the whole industry is taken under consideration, I think we have better management of currency and the impact on the margin because of currency movement is extremely low," Balakrishnan added.