Top five Indian IT companies are expected to post single digit growth rates for the current fiscal year even as the industry body Nasscom predicts software export revenue growth of 12-14% for the year.
Domestic IT majors - TCS, Infosys, Wipro, HCL Tech and Tech Mahindra - are expected post a single-digit growth rate of 5-9% in their revenues for 2015-16, growing at the slowest pace since the financial crisis of 2008, according to analysts.
"I think what we are seeing is a slowdown in the (traditional) hunting grounds, particularly around traditional application development maintenance (ADM) and BPO work," said Jamie Snowdon, executive vice-president of research operations at HfS Research.
Further, India's top five software firms may miss the Nasscom's FY 16 growth forecast for the first time in years, which is more worrisome.
"Our modelling has factored in a certain figure for the likes of TCS - now we have to wait and see how the Q3 numbers turn out, before we change our projections," a Nasscom executive told The Economic Times, requesting anonymity.
Industry watchers attributed the slowdown in growth to a slew of factors including reduced IT spending by top clients such as General Electric and Citigroup, changing IT landscape and impact from cross-currency fluctuations over the past one year.
Recent floods in Chennai, which severely disrupted operations of IT companies in the city, have already made TCS and Wipro to issues warning over their revenue growth in the October-December quarter.
With the emergence of newer technologies such as cloud computing, top clients of India's $146-billion IT industry are "increasingly" demanding more output from the service providers, which has led to "pricing war" among the leading IT firms.
"Typically, we are very selective with clients, we go after only Fortune 2000 companies, so whenever we have an opportunity in our client space and if it's a large deal, we try to be as aggressive as our competition is and try to win that," Infosys, COO Pravin Rao had said in an interview with ET in November.