Cognizant technologies’ lowering of its guidance for next half of the year is causing shivers to the Information Technology industry in India. Cognizant Tech cuts its second half growth by almost 5%. The company made it clear that it was anticipating slowdown in receiving business from clients more specifically from healthcare sector.
Though, healthcare as a vertical contributes less than 3% of the Indian IT exports, but the concerns remain at the macro level as BFSI has already taken a beating, more such verticals falling prey to the US slowdown will add misery to the smaller players in the industry.
Also, the hoopla surrounding the IT industry that any bad news for US economy would translate into more offshore work would not entirely come true. Cognizant’s guidance reveal that as the economic scenario worsen, more and more companies might be unwilling to start new projects. The company has also stressed the need to focus on managing the expenses and increasing utilization of resources, thus indicating that in near term most of the companies in IT industry would be paying attention to remain efficient to retain profitability rather than generating higher growth from new projects. The only positive outcome of Cognizant’s guidance was for consulting and knowledge process outsourcing business as company intended to expand its service offerings in these areas, a large chunk of it may come to India.
Though, healthcare as a vertical contributes less than 3% of the Indian IT exports, but the concerns remain at the macro level as BFSI has already taken a beating, more such verticals falling prey to the US slowdown will add misery to the smaller players in the industry.
Also, the hoopla surrounding the IT industry that any bad news for US economy would translate into more offshore work would not entirely come true. Cognizant’s guidance reveal that as the economic scenario worsen, more and more companies might be unwilling to start new projects. The company has also stressed the need to focus on managing the expenses and increasing utilization of resources, thus indicating that in near term most of the companies in IT industry would be paying attention to remain efficient to retain profitability rather than generating higher growth from new projects. The only positive outcome of Cognizant’s guidance was for consulting and knowledge process outsourcing business as company intended to expand its service offerings in these areas, a large chunk of it may come to India.
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