Infosys, India’s second-largest software services exporter, cut the upper end of its annual revenue forecast, raising concerns about near-term demand for services provided by the $245 billion Indian information technology sector.<\/p>\n
The company now sees full-year revenue growth at 1%-2.5% excluding foreign exchange volatility, versus a prior view of 1%-3.5%. The company’s results come a day after industry leader Tata Consultancy Services also warned that clients were still hesitant to spend on discretionary projects amid inflationary pressures and high interest rates.<\/p>\n
“Digital transformation programs and discretionary spends are low and decision-making is slow,” Infosys Chief Executive Officer Salil Parekh said. The company is seeing project ramp-ups being pushed to the back end of the year, Parekh said.<\/p>\n
Infosys’ U.S.-listed shares fell 3.3% in premarket trading, while its Mumbai-listed shares closed 1.9% lower ahead of the results. Analysts said the company’s results were a sign that the IT sector is facing a slowdown as clients become more cautious about spending.<\/p>\n
“We continue to see a significant amount of market hesitancy resulting in delayed revenue. This is driven by uncertainty about the economic cycle and the increasing conviction that a recession is likely in 2024,” Peter Bendor-Samuel, chief executive at research firm Everest Group, said.<\/p>\n
He added that the industry is unlikely to see significant acceleration until the second half of next year.<\/p>\n
Infosys also said that it is not going to campus for recruitments “at the moment”, after offering jobs to roughly 51,000 freshers in fiscal 2023.<\/p>\n