I think the party may be over for the time being. The currency printing frenzy in the US is more than likely to produce high inflation in the US and a weakening of the dollar. This is likely to impact the dollar arbitrage business fairly negatively for these companies.
I have no idea where the dollar-rupee exchange rate will go, but even a 10% weakening of the dollar (around Rs. 40 for a greenback) would mar the prospects of remarkably.
Now, let us think what what these companies can do to fend off the currency challenge.
- It can hedge it's currency position (net zero hedge position)
- Reduce it's onshore employee strength
- Look to increase geographic diversification (spread off into countries like Vietnam, Philippines, Hungary, Romania etc) to contain the employee wage hikes in India
- Move to more asset based (more reusable components in service delivery)
- Try to get into product delivery as opposed to vanilla ADM (application development and maintenance)
- Look for increasing revenue/employee (i.e. employee productivity)