MUMBAI, INDIA: Gaps are widening and the industry looks in a weak phase, the way Infosys results are being interpreted.
Partha Iyengar, Head of Research - Gartner, India said, "Infosys continues its relatively weak and underperforming trend and year-end outlook, with the view that the market continues to be weak. It will be interesting to see what the other providers' results are in the coming few days, but it is likely that the trend of performance gaps widening between various Indian service providers will continue this quarter as well and could be a trend for quite a few quarters to come."
The information technology bellwether had caught analysts on the hop in July when it cut its annual sales forecast more deeply than expected - as global economic uncertainty hit tech spending. Interestingly, analysts had predicted Infosys, which has a market value of around $26 billion, will revise its revenue growth estimate to around six per cent for the year to end-March, boosted by its acquisition last month of Swiss consultancy Lodestone.
TCS is due to report its July-September results on October 19.
And in July, the company cut that forecast to five per cent from its April estimate for eight to 10 per cent growth. This week Iyengar had talked about some strong indications that software services providers would outperform the industry estimate this year. The National Association of Software and Service Companies (NASSCOM) has estimated exports will rise 11-14 percent in the year to March - down from 16 percent last year and about 30 percent before the global financial crisis.
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"I'm leaning towards ... we're actually going to outperform the NASSCOM estimates in terms of IT services growth," Iyengar had told reporters by phone from a symposium in Goa, southwest India.
He also said there was a clear drive to reduce the cost of IT, the traditional cost of running a business. "That's the sweet spot the Indian players have played in for a long time," he said.