The shares for one of India’s top software companies have plummeted almost 7 percent this month as they stated that some of their most important clients in the U.S. are keeping discretionary spending at an absolute minimum.
Tata Consultancy Services Ltd (TCS) hit a half year low as the company reported that according to their own data, as of the end of last month, spending from their top ten financial services clients in America has been “incredibly cautious” and in many cases they have been holding off on any new purchases.
A spokesman for the firm said late last night that the recent lack of orders has “significantly affected the company’s forward momentum.”
Anthony Russell, Senior Vice President at Monex BMO Securities, who are focused on the software market, commented, “The U.S. is an absolutely massive market for India’s software industry, a field that is worth around $200 billion annually. The next biggest territory for them is Europe, a very distant second. This is a setback for TCS but we are confident they can shake it off.”
TCS will take a severe hit not just from lower revenue but also the exchange rate fluctuations, which are not favouring the rupee at the moment.
Compared to the first quarter’s growth of 4 percent, TCS achieved only 1.5 percent revenue growth for the second quarter.
Some brokerage firms are slashing estimates for the Indian software giant by around 3 percent citing downward risks and other challenges.
