Rupee At Record Low: Which Sectors Could Gain And Which May Suffer

Rupee At Record Low: The rupee has remained under pressure in recent sessions, slipping to record lows against the US dollar amid rising crude oil prices, global uncertainty and strong demand for the greenback.

The rupee, on May 20, weakened further and touched a fresh record low of 96.89 against the US dollar. The decline in the local currency has come largely due to the persistent tensions between the US and Iran, which have pushed crude oil prices above $110 a barrel, rising concerns over global inflation.

Given that India imports more than 85 per cent of its crude oil requirements, a rise in global oil prices significantly increases the country’s import bill. Higher crude prices also raise demand for the US dollar from oil marketing companies for import payments, putting additional pressure on the rupee. At the same time, elevated oil prices widen India’s trade deficit, further weighing on the domestic currency.

Apart from rising crude oil prices, the rupee has also come under pressure due to the strengthening of the US dollar globally. Higher US bond yields have increased the appeal of American assets for foreign investors, leading to capital outflows from emerging markets such as India and further supporting the dollar.

Sectors Likely To Benefit From Weakness In Rupee

However, not every sector is negatively affected by a weak rupee. Export-oriented industries typically tend to benefit from currency depreciation. Since many of these companies earn a large share of their revenue in dollars, a weaker rupee helps translate those earnings into higher revenue in rupee terms.

IT Sector

India’s $250-billion IT industry derives a significant portion of its revenue from overseas markets, particularly the United States. Large-cap IT companies such as Tata Consultancy Services (TCS), Infosys, HCLTech and Wipro typically benefit when the rupee weakens against the dollar as their export earnings rise in rupee terms.

Rajesh Singla, CEO and fund manager at Alpha AMC, a Sebi-registered Category I Alternative Investment Fund (AIF), said, “IT Services is the most straightforward beneficiary. Indian IT companies bill in dollars and pay salaries in rupees. Every percentage point of rupee depreciation directly improves their margins without any change in operations.”

Ruchit Thakur, market analyst at VT Markets, said a weaker rupee not only lifts rupee revenues for IT firms but also improves operating margins as most employee and operational costs remain rupee-denominated.

“The IT industry gains the most from dollar revenues since they increase INR earnings, reduce exposure to imported raw inputs, and improve EBIT margins,” Thakur said.

Pharmaceuticals

Apart from IT, analysts believe pharmaceutical companies are also likely to gain from the depreciation in the domestic currency. India is one of the world’s largest suppliers of generic medicines, with a large share of exports going to the US and Europe.

“India exports over 20 per cent of global generic drugs largely to the US and Europe. A weaker rupee makes every shipment more profitable without any operational change,” Singla said.

Thakur added that Indian pharmaceutical exporters benefit because a substantial portion of their revenues comes from overseas markets, especially the US, leading to higher export realisations and stronger dollar cash flows.

Other Sectors

Experts said sectors such as specialty chemicals, textiles, engineering goods and auto ancillaries could also benefit from a weaker rupee.

“Specialty Chemicals is the less-discussed beneficiary but equally real. India's specialty chemicals industry serves global customers through dollar-denominated contracts. When the rupee falls, they earn more rupees per dollar, directly improving margins,” Singla said.

He added that auto ancillary companies with strong global original equipment manufacturer (OEM) relationships stand to gain as Indian component exports become more competitive in overseas markets.

Ravi Singh, chief research officer (research) at Master Capital Services, said exporters across engineering goods, specialty chemicals, textiles and auto ancillaries typically benefit because Indian goods and services become relatively cheaper for international buyers.

Bhautik Ambani, associate director and CEO at AlphaGrep, a quantitative trading and investment firm, said a weaker rupee can also support India’s broader manufacturing ecosystem by improving export competitiveness and encouraging import substitution.

“A weaker rupee is often viewed negatively, but it can also act as a tailwind for India. It boosts the competitiveness of exporters across IT, pharma, textiles, and manufacturing, supports remittance inflows, and strengthens domestic manufacturing as imports become more expensive,” Ambani said.

Sectors That Could Face Pressure

Sectors that depend heavily on imports could face higher costs and pressure on profit margins. Experts said industries such as aviation, OMCs, automobiles, paints, electronics and fast-moving consumer goods (FMCG) may remain under pressure if the rupee continues to weaken.

Oil Marketing Companies

India imports nearly 85 per cent of its crude oil needs, making the economy highly sensitive to rising oil prices and currency movements. A weaker rupee increases fuel import costs, widens the trade deficit and can also push inflation higher.

“The businesses most likely to face pressure are the oil and gas sector and oil marketing corporations. A weak rupee significantly raises the landing cost of petroleum because most of India's crude oil is imported,” Thakur said.

Crude-Sensitive Sectors

Singla said sectors such as aviation and paints could also face challenges. “Aviation is vulnerable because aircraft leases and fuel are dollar-denominated, while paints companies face rising raw material import costs when the rupee weakens,” he said.

The aviation sector is especially exposed because aviation turbine fuel (ATF), aircraft lease payments and maintenance costs are largely linked to the US dollar. “The aviation industry will face increased challenges because aircraft leases, maintenance and aviation fuel are all priced in US dollars,” Singh said.

Auto And Auto Ancillary

Automobile and electronics companies that rely on imported components may also see higher procurement costs if the rupee weakens further. Companies with large dollar-denominated debt could face additional pressure as repayment costs rise.

What Should Investors Do

Despite the near-term pressure on some sectors, experts said investors should focus on companies with strong export earnings and lower dependence on imports.

Singla noted that India’s exports rose to nearly $860 billion, while corporate profits grew around 15 per cent year-on-year in the December quarter of FY26, partly supported by the weaker rupee.

“The currency move is not just a risk for the right businesses, it is a genuine earnings driver. The key is identifying companies with high dollar revenue and low dollar costs. That is where the outperformance will come from,” he said.