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Indian outsourcers expected to report weak Q2 revenue growth

John Ribeiro | July 9, 2012
A slow recovery in the U.S., the debt-crisis in Europe, and slowing growth in the domestic market is likely to have slowed down revenue and profit growth in U.S. dollar terms at Indian outsourcing companies in the second quarter, according to analysts.

Unlike earlier when the entire outsourcing industry rose or fell together, companies are now responding differently to market conditions.

Infosys and Wipro are facing challenges due to company-specific issues, Arora said. While Wipro seems to be re-building, Infosys continues to face challenges in demand with customers waiting for certainty in a visa lawsuit against the company before deciding on specific projects, he added.

Jay Palmer, an Infosys employee, filed a lawsuit last year against Infosys, in which he alleged that he was harassed after refusing to help the company use B-1 visas, a business visitor visa, for work he claims needed an H-1B work visa. Infosys is also the target of a federal investigation in this connection.

Tata Consultancy Services, India's largest outsourcer, and Cognizant Technology Solutions seem to be doing well, though it could face some impact of the slowdown in demand from large financial institutions, Arora said. "Expect them to deliver 3 to 5 percent sequential growth," he added.

 

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