The US banking turmoil has hit India’s flagship IT service providers Tata Consultancy Services and Infosys, which this week reported that anxious American clients had avoided spending decisions and even cancelled projects.
Both TCS, India’s second-biggest listed company by market value, and rival Infosys missed analysts’ expectations on growth, as fears of a recession and a crisis in US banking spooked companies into trimming their IT spending.
Following the collapse of specialist US lenders Silicon Valley Bank and Silvergate, and UBS’s emergency takeover of Credit Suisse, “there was a pause in spending in the month of March by the banking customers”, said Sumeet Jain, an IT sector analyst at Mumbai-based ICICI Securities. He said this delayed decision-making and spending “for a few weeks, it wasn’t even an entire month”.