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Nasscom: Credit crunch to hit BPOs

September 18th, 2008

NEW DELHI: With the tentacles of Lehman Brothers fiasco unfolding on the Indian software companies, the industry body Nasscom today said there would be short term and company specific impact.

Stating that the Indian IT-BPO sector is a part of the global financial system that has seen a lot of turbulence in the recent past, the apex body said “our preliminary analysis of the current situation indicates that the impact will be short term and company specific; we will continue to keep a watch on any further downstream impacts.”

With nearly half of their revenues coming from banking and financial services segments, India’s top software exporters are closely monitoring the financial crisis spreading across markets.

While Infosys and TCS, the country’s two largest IT firms, said they do not comment on individual clients, the third largest IT firm in the country, Wipro said it was in dialogue with failed Lehman Brothers, although revenues from it were modest.

The fourth largest software exporter from the country Satyam also said that it was “concerned” over the developments in the US. “We are very concerned about the recent development in the BFSI segment in the US. However, the Lehman Brothers episode will not have any impact on the company” Satyam Computer CFO Srinivas Vadlamani said.

HCL Technologies, however, said that the two US majors — Lehman and Merrill Lynch — were not its clients and therefore would not adversely affect the company.

When one puts all of this together, there is some loss but given that most of the top five companies have over 40-45 per cent exposure to BFSI space, then mood is worried and concerned right now, said an analyst.
Source:TOI

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