Today morning, L&T Tech announced that it has won a 5-year, multi-million-dollar deal from European luxury vehicle maker BMW Group. This is for providing high-end engineering services for the company’s suite of infotainment consoles targeted for its family of hybrid vehicles.

The company’s team of engineers will be providing services in the areas of software build and integration, infotainment validation and defect management. It has an existing Near Shore Center which provides engineering and R&D services for BMW Group’s suite of infotainment consoles and its family of hybrid electric vehicles.

This is a very good news for L&T Tech but because of the rupee crashing to Rs.80 on expectations of another US Fed rate hike in coming days, IT stocks are on the receiving end today. Usually, a falling rupee means a boost in revenue for IT companies who earn more than 50% of their revenue in US dollars. But this around, the market is worried about the inflationary pressures in US, the lower-than-expected Q1 numbers and the probability that margins could be impacted due to overall rising costs. The fear is that higher pay packages and increased travel costs will nullify the falling rupee advantage.

For now, this is more of a knee-jerk reaction and once the dust settles, IT sector will remain a defensive buy.

L&T Tech is down in the red, falling over 5% to an intraday low at Rs.3477 while the BSE IT index is down 3.5% with 58 of the 62 in the index down in the red.