INTERNATIONAL JOURNAL OF ENGINEERING MANAGEMENT AND
SOCIAL SCIENCES

MANAGING FOREIGN EXCHANGE RISK: A CASE STUDY OF WIPRO LIMITED

Foreign exchange risk management is a critical function for multinational corporations operating across currency boundaries, particularly in India's export-driven Information Technology (IT) sector. This study examines the foreign exchange risk management practices of Wipro Limited, one of India's top four IT companies, over five financial years from FY2020-21 to FY2024-25. The objectives are to analyse the nature and extent of Wipro's forex exposure, evaluate the hedging instruments deployed, assess the financial impact of currency fluctuations on revenue and profitability, and identify key challenges and areas for improvement in the company's risk management framework. The research adopts a descriptive and analytical design, relying on secondary data drawn from Wipro's published Annual Reports, Ind AS 107 financial disclosures, RBI exchange rate databases, and NASSCOM industry publications. Trend analysis, ratio analysis, percentage analysis, and correlation analysis are applied to examine USD/INR exchange rate movements, hedge coverage, forex gains and losses, the impact on operating margins, and the composition of Wipro's derivative portfolio. The study finds that Wipro consistently maintains a hedge coverage ratio of 47-57% of its projected foreign currency revenues through a combination of forward contracts, currency options, and cross-currency swaps, and that INR depreciation over the study period particularly the sharp 7.2% depreciation in FY2022-23 provided a tailwind to rupee-equivalent revenues, even as rising hedging costs partially offset the gains. The study concludes that Wipro's treasury framework is robust and recommends the adoption of dynamic hedging models, increased use of currency options for tail-risk protection, and enhanced board-level oversight of forex risk governance. The findings contribute to the growing body of empirical literature on corporate forex risk management in the Indian IT sector.