IT majors turn cautious post Lehman, Merrill fall out

NEW DELHI: With nearly half of their revenues coming from banking and financial services segments, India's top software exporters today said they 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 dialouge 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 Satyam," 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 have any fallout for the company.

Shares of HCL Tech today rose by over three per cent, while that of Infosys, TCS, Satyam and Wipro declined.
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.

Already finding it tough to cope with the slowdown in the US, the beleaguered Indian IT vendors are likely to see some reversal in revenues coming out of their banking practice with the crisis of Lehman Brothers declaring bankruptcy, while another investment bank Merrill Lynch was in the process of being bought out by Bank of America.