MUMBAI--Shares of Indian software exporters fell on Friday on fears that information technology spending by their key U.S., European clients will likely remain sluggish, after business software maker Oracle Corp. reported stalled growth in its latest quarter on lower software licenses sales.
Oracle's weaker-than-expected software license sales came as a surprise as most Indian information technology companies have so far been maintaining that they are seeing a recovery in spending on discretionary projects.
Top IT companies in India earn more an 80% of their revenue from the U.S. and European clients. A third of their businesses are vulnerable to shift in spending on discretionary projects.
On Thursday, Oracle reported a flat profit and an unexpected 1% decline in total revenue for its fiscal third quarter. The numbers fell short of estimates and also raised questions about the company's transition into a provider of Web-based software.
"Oracle sold fewer new software licences in the last quarter suggesting that discretionary spending has not picked up in the market," said an analyst for a local brokerage.
Infosys, India's no. 2 software exporter, fell as much as 1.6% in the early trade on the Bombay Stock Exchange. It was trading down 0.9% at 2,850.00 rupees in the afternoon, while bigger rival Tata Consultancy was 0.7% lower to 1,550.65 rupees.
HCL Technologies fell 0.8% to 766.40 rupees and Wipro dropped 0.2% to 433.15 rupees.
No comments:
Post a Comment