Journal Press India^®

Author Details ( * ) denotes Corresponding author

Every business has to face risks during its daily operations. These can be in the forms of changing interest rates, fluctuations in exchange rate, changes in commodity prices, and the credit risk of the customer. The financial management analyses these risks and takes appropriate steps in order to reduce and manage these risks. Even though risks cannot be removed entirely, they can be controlled. The paper researches on how organizations manage these unavoidable risks and its effect on the performance of the companies.
The SMEs that are engaged in the business of import and export have to constantly deal with currency risk exposure. This is managed by entering into derivates contracts and is frequently done by the larger players. There are many impacts of exchange rate fluctuations like stagnant growth of industries, loss of market share, impact on profit margin, merchandise trade loss, reduction in capital flows.
In the light of above reasons the present study is undertaken to know the effect of exchange rate hedging on the volatility of revenues and profits after tax of SMEs in India.
The research focuses on effect of exchange rate hedging on the volatility of revenues and profits after tax of SMESs the operations of small and medium enterprises in India that are listed on the NSE Emerge, a portal specifically catering the SMEs. .

Keywords

Effect; Hedging; Risk; SMEs and Volatility

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