Alarm bells for Indian IT sector! US tech companies’ weak results, IT budget reduced, know what will be the effect?

New Delhi. Due to the fear of recession in America, its clear effect is being seen on the results of US IT companies. Shares of Alphabet Inc (Google’s parent company) and Microsoft Corp fell 9.6 per cent and 7.7 per cent sharply on Wednesday due to weaker-than-expected performance in the September quarter. Due to the impact of the business of these giant technology companies, its effect can also be seen on Indian IT companies.

Actually, Indian IT industry gets maximum business from countries like Europe and US only. North American and European markets account for more than 80 per cent of TCS and Infosys’ revenues.

Many companies reduced IT budget

Rising inflation and rising interest rates have dealt a major blow to the US economy and fears of recession have forced many companies to reduce their IT budgets. This has directly affected the products and services of tech companies. Due to poor macroeconomic conditions in the US and Europe, order flow, business growth and revenue, Indian IT companies are expected to perform poorly and their share prices may remain low.