While the market continued to speculate about the impact of the Russian currency crisis on the Indian exporters the facts revealed by many of these companies throws light on the strategic `pricing mechanism' which is adequately tuned to take care of all such economic turmoil.

"We are aware that with our dedicated focus on various international markets and country risk could manifest itself by way of political and social turmoil and currency movements," stated the detailed reply by Dr Reddy's Laboratories to Financial Express.

"However, contracts with clients are pegged in US dollars and are signed on 120 days credit. Moreover, the pricing mechanism takes into account the depreciation of the rouble hence the risk of any currency devaluation is passed on to the customer," it further clarified.

Interestingly, the company has also admitted that the market has genuine reasons to be worried about. The reasons ---- about 12 per cent of the current turnover of the company comes from the Russian markets (about 5 per cent from other CIS countries) and about $ 12 million is the receivable from Russia. The extended credit period coupled with the question of `write off' was also addressed by the company. "This concern is more so since the company had earlier in 1996-97 had a similar experience," highlighted the official reply.

While explaining the nature of consumer demand especially in case of pharmaceuticals, the official note also threw light on the consumer psychology of `discretionary spending', which would thereby help the company tide over any such financial crisis.

Moreover, it is also worth noting that since all transactions whether in case of Dr Reddy's, Nestle or Tata Tea, are denominated and settled in dollar terms, the magnitude of the problems anticipated on account of currency devaluation should be at the lowest ebb.

Interestingly, in the case of Dr Reddy's the company realised the same dollar prices for their exports despite the rouble devaluing from 4695 per dollar in January 1995 to 6,200 per dollar till recently.

"The devaluation of the rouble throws up an opportunity to Indian companies since the products exported are priced in dollar terms and are substantially lower than that of the MNCs from West and East European companies," explained a research analyst with a leading FII brokerage firm.

Further, in case of pharma companies most of the sales are free market sales coupled with zero exposure to government sales. Moreover the Indian exports to the CIS markets are fully covered by ECGC for political risks.

While the panic on the local bourses subsided, the stock price of Dr Reddy's finally stabilised at Rs 487.25 registering a meagre loss of Rs 1.75 over Monday's close. The stock accounted a phenomenal volume of 5.5 lakh shares.