Indian IT companies bracing up for one of the worst quarterly results

India's top IT firms are bracing themselves for one of their worst quarterly results in recent memory. Their performance in the typically weak quarter through December is further hurt by the floods in Chennai and a general slowdown in global technology spending, several company executives and analysts said. The setback will have further ramifications for India's $146-billion IT industry. Homegrown giants such as TCS and Infosys may fall short of Nasscom's 12-14% exports growth outlook for FY16. There are worries that the current fiscal year may end as the worst in terms of revenue growth for Indian IT. Executives at the industry lobby group are even contemplating revising their projections for this year, according to people familiar with the discussions. "Our modelling has factored in a certain figure for the likes of TCS (Tata Consultancy Services) - now we have to wait and see how the Q3 numbers turn out before we change our projections," said a Nasscom executive, who declined to be named. At least half-a-dozen analysts and brokerages ET spoke to are of the opinion that India's top five software exporters may post a 1-2% fall in revenue - or at the most record a flat performance - on a sequential basis in the fiscal third quarter ending on December 31.

TCS backed out of talks to buy Dell's Perot Systems

Tata Consultancy Services negotiated with Dell to buy its information technology management business Perot Systems, but a disagreement over price resulted in the talks falling through, two people directly aware of the discussions said. N Chandrasekaran, the CEO of India's largest software company, and TCS global head of merger and acquisitions Debasis Poddar, were involved in the talks that took place at least a week ago, according to the sources. "TCS was in the bidding. Poddar and Chandra were both involved, but the price was an issue," said one of the people mentioned above. He requested anonymity since the discussions were confidential. TCS declined to comment. Dell did not immediately reply to an email seeking its view. On Friday, Reuters reported that Dell was in talks with Cognizant, NTT Data and Atos to sell Perot Systems as part of a plan to lessen debt after agreeing to buy EMC Corp for $66 billion. It said Dell was hoping for at least $5 billion from the Perot sale.