MUMBAI, India (AP) — Indian outsourcing giant Infosys reported lower quarterly profit and forecast subdued revenue growth on Friday due to fragile business confidence in the U.S., sending its shares down 21 percent.
Net profit for the January-March quarter fell 4.1 percent from a year earlier to $444 million, the company said.
It forecast revenue to grow between 6 percent and 10 percent for the fiscal year ending March 2014, below the expectations of analysts.
Infosys based the muted forecast on orders from existing customers plus an expectation that economic volatility and uncertainly will persist in the United States, the company's biggest market, said Ashok Vemuri, head of global manufacturing and engineering services
"I would actually categorize the U.S. market as being extremely fragile," Vemuri said.
The U.S. government sequester, a series of across the board spending cuts that took effect March 1, is adding to the gloomy mood.
"Most of our clients are doing well in terms that they are generating cash, but they are showing absolutely no indication to spend it," he said.
Infosys is considered a bellwether for India's outsourcing industry, which has been hit by weakness in the world economy. The industry provides information technology and business support services to companies from Europe to the United States.
Revenue for the January-March quarter rose 9.4 percent from a year earlier to $1.94 billion.
Infosys shares were down 21 percent to 2,308.6 rupees in Mumbai stock trading.