U.S. recession hits Indian IT companies
Infosys Technologies Ltd. Chief Executive Officer K. Gopalakrishnan, center, flanked by Chief Operating Officer S. D. Shibulal, right, and Chief Financial Officer V. Balakrishnan
April 16 – The U.S. recession might not affect the bouyant Indian economy, but India's IT services industry which sources a majority of its work from the west is showing signs of being hit.
On Tuesday, the Indian IT industrys' bellwether company, Bangalore based Infosys posted a lower than expected forth quarter profit. Net profit rose 9.2 percent to 12.49 billion rupees (315.04 million dollars) in the fourth quarter ended March, from 11.45 billion rupees. The profit missed analyst estimates of 12.6 billion rupees.The AFP reported that An Infosys survey showed that as many as 76 percent of customers in the US, which provides two-thirds of the revenue earned by Indian software makers, planned either to cut budgets or leave them unchanged.
"US companies are passing through a corridor of uncertainty as they come to terms with the slowdown, or recession, in the US economy," said Tejas Doshi, an analyst at Mumbai-based Sushil Finance.
"They have not been able to decide on their budgets," Doshi said. "New project starts and business starts have been delayed because of the uncertainty, which has definitely impacted Indian software firms."Infosys added 40 clients during the quarter. Revenue rose by a fifth to 1.136 billion dollars.