Infosys shares fall as sales forecast is cut

SD Shibula CEO of Infosys Limited, and CFO V Balakrishnan Many of India's IT outsourcing companies say that the global outlook remains difficult

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Infosys shares have fallen 8% after the software exporter reported weaker-than-expected earnings and cut its sales forecast.

Net profit in the three months to June was 22.9bn rupees ($411m; £265m), up 33% from last year's 17.2bn rupees but still below analysts' expectations.

It also cut its annual sales growth forecast to 5%, against a previous estimate of between 8% and 10%.

Industry watchers say demand has been falling as businesses cut IT budgets.

For the fiscal year that began in April, Infosys now predicts that revenues in dollar terms will grow by 5% to $7.34bn.

"Infosys' guidance is bad and it will have implications for the sector as well," said Paras Adenwala from Capital Portfolio Advisors.

"It clearly reflects a slowdown in Europe and in the United States and (problems with) the company's internal policies."

Infosys and its main competitors, Tata Consultancy Services and Wipro, are part of the outsourcing sector in India that has seen demand from companies, mainly in Europe and the US, looking to cut costs and increase efficiency.

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