India’s largest services provider Tata Consultancy Services (TCS) today in a note to analysts said that it does not see any weakening of demand. This was in reply to a CLSA brokerage’s report downgrading the IT services companies and the sector.
“Clients continue to fund new projects and ramp-ups are proceeding smoothly. A 2 per cent GDP growth versus a 3.6 per cent growth has little impact on our US-based clients who are mostly global corporations getting half or more of their revenues and all of their growth from overseas markets,” said a TCS investor relation personal in an email to the investors.
CLSA in a report on Monday, downgraded TCS and Infosys Technologies to underperform. They also downgraded the sector from neutral to underweight and said that Indian IT holds little promise of sustainable absolute returns hereon.
TCS further clarified that while the worry of a systemic shock from a Greek default remains, it is no incremental negative either. “The sovereign default overhang has been around for quite a while and most of our BFS clients have been steadily reducing their PIIGS exposure over time. Our management is in close touch with CXOs of our key accounts. At this time, they are proceeding with their plans for the year,” the mail said.
CLSA also pointed out that the visa issue is hurting Indian companies.
