Shares of Indian outsourcing giant Infosys slid almost nine percent Thursday after the firm warned that quarterly revenues may be weaker-than-expected following project cancellations. Analysts said the revenue warning could also have implications for the rest of India's flagship outsourcing sector, which has made the country a top business destination by offering services including software development, information technology and engineering to other, mainly global, companies.
"Some of our clients have seen a slowdown in their business. These are across various verticals leading to unanticipated project rampdowns and cancellations in Q4," Infosys chief S.D. Shibulal was quoted by domestic media as saying. Shibulal's comments late Wednesday came as the Bangalore-based company has been seeking to reinvent itself with a strategic overhaul to focus on higher-value software and consulting services instead of labour-intensive outsourcing services. The company's shares pared some losses to close 8.54 percent lower at 3,357.50 rupees after trading down nine percent earlier in the day Thursday.
Infosys' shares have shed 12.73 percent of their value from their 52-week peak hit in early March. Last December, V. Balakrishnan, a top executive at Infosys and tipped as a future chief executive resigned, one of a string of departures since co-founder Narayana Murthy returned to lead the company. Murthy was reappointed executive chairman last June, two years after he retired, amid hopes he could help Infosys regain market share lost to rivals such as Tata Consultancy Services (TCS) and HCL.
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