Indian tech sector faces slowdown as key corporations tighten budgets
Infosys Ltd., one of India’s major software companies, has issued a warning that its sales may lag behind estimates due to key customers in finance and other sectors pulling back on spending.
This announcement reflects a wider trend of corporations tightening their budgets amidst an economic slowdown.
The news has resulted in a 10% decline in Infosys’ stocks and is likely to impact the overall Indian tech sector, which has a weight of 15% in India’s nifty index market.
This could lead to a weak earnings season for India, particularly in the tech sector.
The weak outlook is not limited to Infosys.
Other big IT companies are also expected to give similar weak outlooks for growth.
This may result in a slowdown in exports for non-technology Indian firms, potentially leading to a lowering of earnings estimates for Indian companies.
The current outlook has come as a surprise for many, as the valuations of software companies had been going up in recent weeks.
The weak guidance from tech companies is seen as a signal that IT spending is likely to stay low in the coming quarters, with companies potentially failing to meet expected revenues.
