India's outsourcing sector faces bleak outlook: analysts

[OhioChick]

19 hours ago

MUMBAI (AFP) — India's software sector, reeling from a huge accounting fraud in one of its flagship companies, faces further problems as US firms scale back in a troubled global business environment, analysts said.

Two of India's top IT companies -- Infosys Technologies and Wipro -- have acknowledged that their revenues are under pressure.

Meanwhile, India's largest software exporter Tata Consultancy Services (TCS) saw its third-quarter net profit rise by a lower-than-expected 1.57 percent from a year earlier because of the global economic slowdown. It traditionally gives no guidance.

The flurry of dismal earnings news and a one-billion-dollar false accounting scandal at Satyam Computer Services earlier this month has combined to cool investor sentiment towards the once red-hot sector, which employs two million workers in India.

"We're seeing a clear slowdown for the IT giants (in the latest quarter) and it's not a surprise," said Apurva Shah, head of research at brokerage Prabhudas Lilladher.

Brokerage firms and analysts say the outlook appears bleak for the top IT companies for at least the next two quarters.

"The near-term outlook for India's IT sector is cautious and uncertain," said Harit Shah, software analyst at Angel Broking.

"Revenue visibility has become hazier than ever. With the US economy likely to undergo an extended period of painful transition, any recovery is likely to take some while," Shah said.

Infosys chief executive S. Gopalkrishnan said last week the budgets of overseas clients would be clearer by mid-February and they were expected to be "slightly less or flat".

TCS does not forecast revenues but admitted it was "operating in a challenging environment".

Infosys Technologies and Wipro said they lowered revenue guidance in their latest earnings forecasts because of the global economic situation.

Infosys' full-year dollar guidance was cautious with revenues expected in the 4.67 billion dollars to 4.71 billion dollar range -- representing growth of 11.8 to 12.8 percent, a far cry from earlier growth of plus 30 percent.

Meanwhile Wipro this week lowered its revenue guidance for the next three months to 1.04 billion dollars -- below the 1.12 billion dollars it notched up in the three-months to December last year.

http://www.google.com/hostednews/afp/article/ALeqM5gl-M6hqwg-axn1Jt1DWgLdBoPqnw

:nopity:

[Skittles]

1. they can all fuck themselves

[Joe Bacon]

3. Screw Tom Friedman and his "World is Flat" crap

This "Free Trade" shit has done more to damage America than anything else!

[pacalo]

2. If the greedy owners would have kept the jobs in the U.S., we'd have had more money to spend

on mortgages, automobiles, health expenses, retail goods, etc.

Close to four-fifths of the world's biggest companies outsource work to India, with about 60 percent of the contracts coming from the United States.

[ChromeFoundry]

4. Damn straight we'd have money. n/t