How Does USD/INR Affect Your Portfolio?

USD/INR is not automatically good or bad for your portfolio. It transfers pressure and benefit between businesses.

When USD/INR rises, one dollar buys more rupees. A company earning dollars may report more rupees for the same invoice. A company paying for fuel, aircraft leases, machinery or debt in dollars may need more rupees for the same bill.

During FY26, USD/INR rose from 85.43 on 31 March 2025 to 93.83 on 31 March 2026. That was a 9.83% increase in the rupee price of one dollar.

The portfolio effect depends on which side of the currency flow each company occupies.

First, understand the quote

USD/INR tells us how many Indian rupees are required to buy one US dollar.

Date	Rupees per US dollar
31 March 2024	83.34
31 March 2025	85.43
31 March 2026	93.83
31 July 2026	95.38

Source: Altys macro series using daily USD/INR observations published through the Federal Reserve’s DEXINUS series. The latest available observation in the dataset on 10 August 2026 was for 31 July 2026. Public source links appear below.

From 85.43 to 93.83:

(93.83 / 85.43) - 1 = 9.83%

So the rupee cost of one dollar increased 9.83%.

You may also hear that the rupee lost 8.95% of its value against the dollar. That uses the reciprocal calculation:

1 - (85.43 / 93.83) = 8.95%

Both statements describe the same move from opposite sides of the exchange rate. The percentages differ because the starting currency is different.

The ₹840 example

Suppose an Indian exporter sends a $100 invoice.

At 85.43:

$100 × ₹85.43 = ₹8,543

At 93.83:

$100 × ₹93.83 = ₹9,383

The same $100 converts into ₹840 more, before hedges, taxes, overseas costs or price changes.

Now reverse the situation. An Indian company must pay a $100 supplier bill. That same currency move raises its rupee cost by ₹840.

Currency has not created free money. It has changed who receives the translation benefit and who carries the translation cost.

The four portfolio channels

1. Dollar revenue

Indian IT services, pharmaceutical exporters, specialty-chemical exporters and some manufacturers earn a meaningful share of revenue outside India.

If their dollar selling price is unchanged and USD/INR rises, those receipts translate into more rupees. The benefit can be strongest when much of the cost base, such as Indian employee expense, remains in rupees.

But “exporter” is not enough. Ask:

• Which currencies are actually billed?
• How much expense is incurred overseas?
• What portion is hedged and for how long?
• Do customers renegotiate prices when the currency moves?
• Is reported growth coming from business volume or only translation?

A currency tailwind can make rupee revenue look stronger even if the number of services delivered has not changed.

2. Dollar costs

Airlines collect most passenger revenue in rupees but have several dollar-linked costs. Aircraft leases, maintenance, parts and a portion of fuel economics can create foreign-currency exposure.

Importers of crude oil, electronics, industrial machinery and raw materials face a similar mechanism. If the selling price cannot be raised immediately, a weaker rupee can compress margins.

The important variable is pass-through. A business with pricing power may transfer the cost to customers. A regulated or fiercely competitive business may have to absorb it.

3. Dollar debt

An Indian company can borrow overseas because the interest rate appears attractive. If the debt is unhedged, a weaker rupee increases the rupee value of the liability and the rupees required for interest and principal payments.

For example, a $10 million obligation is ₹85.43 crore at 85.43 and ₹93.83 crore at 93.83, before considering repayments or hedges.

The exchange-rate move added ₹8.40 crore to the rupee value of the same dollar obligation.

This is why foreign debt should be read with the hedging policy, not in isolation.

4. Foreign assets

An Indian investor holding a US asset experiences two returns:

INR return ≈ foreign-asset return + currency return + interaction

If a US asset is unchanged in dollars while USD/INR rises 9.83%, its rupee value rises by roughly the currency move. If the US asset rises 10% and USD/INR also rises 9.83%, the combined return is slightly more than their sum because the two effects compound.

(1.10 × 1.0983) - 1 = 20.81%

The reverse also applies. A stronger rupee can reduce the INR return from a rising foreign asset.

Why sector labels can still mislead

It is tempting to create a simple list:

• IT good when rupee weakens
• airlines bad when rupee weakens
• pharma good when rupee weakens

Reality is more mixed.

A pharmaceutical company can earn dollars from exports and spend dollars on imported inputs. An airline may hedge fuel or currency. An IT company can have overseas salaries and forward contracts. An importer may have strong pricing power. A manufacturer may import components but also export the finished product.

The net exposure is what remains after the inflows, outflows, hedges and pricing response are combined.

What the FY26 move can do to reported growth

USD/INR did not move in a straight line during FY26. The daily series ranged from 84.27 to 94.83 and averaged 88.35.

This matters because companies translate revenue throughout the year, not only on 31 March. A closing rate affects balance-sheet translation, while income-statement items may reflect average or transaction-date rates. Hedging rates can differ again.

So do not apply the 9.83% year-end move mechanically to reported revenue. Use it as a directional clue, then read the company’s currency note and management commentary.

If an exporter reports 10% rupee revenue growth during a period of large currency support, ask how much came from constant-currency volume and pricing. If an importer protects its margin despite a weaker rupee, ask whether hedges, lower commodity prices or price increases did the work.

A five-question portfolio map

For every company with meaningful foreign exposure, write down:

1. What does it earn? Currency mix of revenue.
2. What does it spend? Imported inputs, overseas payroll, leases and fuel.
3. What does it owe? Foreign-currency debt and repayment schedule.
4. What is hedged? Instrument, amount and duration.
5. What can be passed on? Ability and delay in changing customer prices.

Then classify the exposure:

Exposure	A weaker rupee can initially…
Net dollar earner	Lift rupee translation
Net dollar spender	Raise rupee costs
Unhedged dollar borrower	Increase rupee liability
Holder of foreign assets	Lift INR value of those assets

“Initially” matters. Competitors, pricing, demand and hedges can change the final result.

The practical takeaway

USD/INR is a transmission mechanism, not a stock-market signal.

In FY26, one dollar became 9.83% more expensive in rupees. That could help a dollar earner, hurt a dollar spender and lift the rupee value of a foreign asset. The same company can sit on both sides at once.

Do not ask only whether the rupee is weakening. Ask where the dollars enter, where they leave, what is hedged and who has the power to change prices.

That map tells you far more about portfolio sensitivity than a sector label.

Public sources

• Federal Reserve DEXINUS: Indian rupees to one US dollar
• Reserve Bank of India reference-rate archive
• Infosys investor reports and filings
• InterGlobe Aviation investor relations

Related reading:

• Infosys business model explained
• IndiGo business model explained
• FII and DII flows explained

This article is educational. Altys Labs is not a registered research analyst or investment adviser, and nothing here is investment advice or a recommendation to buy, sell or hold any security.