Home Furnishing Exporter Optimizes FX Strategy, Gaining 90 Lakhs in 5-6 Months

Client Profile

A Noida-based home furnishing exporter operating through three companies, with an annual export volume of 305 crores, primarily dealing in USD receivables. The company focuses exclusively on international markets and has no domestic operations. The business was exposed to fluctuations in the USDINR exchange rate, and it previously followed a conversion policy of converting receivables on the maturity date.

 

The Challenge

The client faced several financial challenges, including:

 

1. Exposure to currency fluctuations: The unpredictable movement of the USDINR rate exposed the company to the risk of losing out on favourable exchange rate fluctuations.

 

2. Suboptimal hedging strategy: By converting receivables only at maturity, the company was not fully capitalising on currency market fluctuations, leaving potential gains untapped.

 

The company’s traditional approach limited its ability to fully benefit from favourable currency movements.

 

The Myforexeye Solution

Myforexeye helped the client optimise their foreign exchange strategy with the following recommendations:

 

- Positioning for hedging: We advised hedging no more than 35–40% of their exposure, enabling the company to benefit from both favourable and unfavourable movements in the USDINR rate without locking in a position too early.

 

- Spot market strategy: Rather than changing their policy of converting receivables at maturity, we focused on helping the company benefit from market fluctuations by capturing the movement in both directions and the premium benefit from the time value of the currency.

 

- Early profit realisation: We informed the client that profits from positions could be realised before maturity by paying only the repo rate. This allowed them to unlock profits early, improving cash flows without waiting for the maturity date.

 

Results and Impact

 

1. Profit from market volatility:
Over the past 5–6 months, the USD/INR market experienced 4–5 significant moves in both directions. With Myforexeye’s strategic guidance, the client capitalised on these fluctuations, generating a gain of ?90 lakhs. We booked USD 7 million forward contracts between 86.00 and 86.70, later cancelling them at spot rates of 84.80 to 85.20. A second round of bookings was made in June 2025 for USD 10 million at an average spot rate of 86.20, with plans to cancel at below 85.00, potentially generating an additional ?1 crore for the client.

 

2. Optimised receivable conversions:
While maintaining their policy of converting receivables at maturity, the client benefited from favourable market movements through the right hedging strategy and by capturing the carry premium.

 

3. Early profit realisation:
The client was able to realise profits before maturity by paying only the repo rate, providing flexibility and enhancing their cash flows.

 

Conclusion

With Myforexeye’s expert advice, the client maximised profits from their USD receivables without changing their existing policy of converting at maturity. By optimising their exposure, hedging strategy, and educating them on early profit realisation, the client was able to gain ?90 lakhs over 5–6 months, effectively managing currency risk and improving cash flow in a volatile and competitive market environment.