How is the rupee's slide affecting Indian companies like PFC?

The rupee's depreciation is causing significant foreign exchange losses on overseas loans, impacting the profitability of companies, including heavily hedged ones like PFC.

Are Indian companies facing a forex crisis?

While currency stress is building and serving as a warning, analysts do not consider the current situation a full-blown crisis comparable to those in 2008 or 2013.

What are the risks for companies with dollar, euro, and yen borrowings?

Companies with borrowings in dollars, euros, and yen face increasing risks of forex losses as the Indian rupee depreciates against these major currencies.

Home / Business and Economy / Rupee Slide Hits Corporate Profits Hard

Rupee Slide Hits Corporate Profits Hard

19 Dec, 2025

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Summary

Rupee's depreciation is causing forex losses on overseas loans.
Even well-hedged firms like PFC reported significant losses.
Currency stress is quietly building, serving as a warning sign.

Corporate India is experiencing a tangible impact on its bottom line as the rupee's gradual depreciation translates into foreign exchange losses on overseas loans. This trend is particularly concerning for companies with unhedged foreign currency liabilities, as the erosion of the rupee's value directly affects their profitability.

Even entities that typically manage currency risks meticulously, like Power Finance Corporation (PFC), have reported notable forex losses. PFC incurred an INR940 crore hit in the first half of fiscal year 2026, highlighting the pervasive nature of this challenge across different hedging strategies.

While analysts suggest the situation does not yet mirror the systemic financial crises of 2008 or 2013, the current currency stress is a palpable and escalating concern. The warning signals are evident, indicating a need for careful monitoring and potential strategic adjustments by businesses exposed to foreign exchange fluctuations.