Infosys COO made a statement; IT Company stocks fall after that
Mumbai, June 07: Infosys, TCS, Wipro and HCL Technologies-some IT majors fell in the share market on Wednesday after COO of Infosys, Pravin Rao, comes out with a statement that clients are likely to cut their IT spend this year.
At around 2.15 pm, TCS was down 3.78 percent to Rs 2,593, Wipro was trading 2.91 percent lower at Rs 544, Infosys was down 2.97 percent to Rs 950 and Tech Mahindra was trading at Rs 397, 2.83 percent lower to its Tuesday closing.
The BSE Sensex was trading almost flat at 31,205.
Pravin Rao had told a business news channel that clients are looking at cutting costs, something that would dent revenues for India’s $150-billion IT industry.
“They (the clients) are taking cost-take-out initiatives in most organisations from what is known as run-the-business. Typically, run-the-business is 70 percent of spends and now there is an urgent pressure to take costs out of this to 50 percent of spends and repurpose that towards new technologies and transformation,” he told CNBC-TV18.
“At the same time, the pace of reinvestment is happening at a much slower pace compared to the cost-take-out,” he added.
The Reserve Bank Of India’s Monetary Policy Committee is yet to announce its statement.