IT Companies Watch Greek Crisis

BANGALORE: Indian IT companies are gearing up for a slower-than-expected recovery in the European market due to the recent Greece debt crisis.

V Balakrishnan, chief financial offcer, Infosys, the second-largest Indian IT company, says they are watching the situation very closely and hopes the debt crisis does not spread across Europe.

"They (clients) are very cautious, they are watching what is happening in the environment. So, they will not commit any spending for the long-term... they will focus on the short-term. Some discretionary deals will happen but nobody will sign any large, long-standing contracts in an environment like this where there are too many volatile factors."

GREEK JITTERS? (Revenue from Europe)

Infosys - 22%

Wipro - 26%

TCS - 25%

Mastek, Tech Mahindra - >50% ))

Most of the European revenues come from countries such as UK, France, Germany, the Netherlands and the Nordic region. Despite this, Wipro officials says IT spending in the region is still very restricted with no discretionary projects in the pipeline.

Manish Dugar, chief financial officer, Wipro Technologies, said: "In general, we have not had a mass return of discretionary spend, so to speak. People are spending only on essentials and cash/capital conservation continue to be the theme... I don't see that having changed either for the positive before the Greece issue happened or for the negative after the Greece issue happened."

Analysts say, unlike the US, European clients still don't consider outsourcing as strategic, and the uncertain environment could impact offshoring work to India.

Despite putting on a brave face, the Indian IT industry will be edgy over the next few weeks as crucial events like the UK elections and the Greece bailout come through....