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Europe woes could hit Indian tech firms
Published on 11 Jul. 2010 12:27 AM IST
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India’s leading information technology exporters should report robust quarterly sales, thanks to improving demand from their mainstay financial clients, but Europe’s debt crisis and rising salaries could cap their outlook.
Tata Consultancy Services, Infosys Technologies and Wipro Ltd face uncertainty on orders from Europe - the second-biggest market for the sector after the United States. Indian software services firms are ramping up investments to grow their market share in Europe, which accounts for about a third of their revenue. The U.S contributes more than half.
Research firm Forrester said in a report last week that Europe’s volatile economic situation and uncertainty about corporate IT budgets would result in possible delays or cancellations of some outsourcing projects.
Analysts expect Infosys, which sets the tone for India’s $60 billion outsourcing sector and counts BT Group and Goldman Sachs among its clients, to edge up its dollar revenue growth forecast for 2010/11 to 17-19 percent from the 16-18 percent estimated by the company in April. Investors will focus on management comments on deal flows, the outlook for pricing and technology spending by their clients.
Growing competition from IBM, Accenture and Hewlett-Packard also pose a risk for the industry, which manages complex computer networks and maintains technology operations for Fortune 500 customers.

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