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Indian IT hits worst slump in 7 years: Foreign Media

Infosys

Mumbai: Shares of Infosys slumped over 13 per cent, eroding Rs 24,839 crore from its market valuation, after Vishal Sikka, the first non-founder CEO of the company, resigned.

The IT major’s scrip plummeted 13.39 per cent to Rs 884.40 – its 52-week low level – on BSE.

At NSE, the stock crashed 13.38 per cent to hit its one- year low of Rs 884.20.

While Sikka cited heightened acrimony with a cohort of founders at Infosys Ltd., the malaise is much deeper, and threatens to become a faultline for Asia’s No. 3 economy. Software services exports are experiencing their longest slump in seven years, which could blow the current account deficit to the widest since 2013 and pressure the rupee. Policy makers are also bracing for a hit where it hurts the most jobs.

India’s economic survey cited President Donald Trump’s ‘Buy American, Hire American’ executive order and the U.K.’s increase in visa costs as factors limiting the free movement of Indian engineers. Moreover, automation threatens 69 percent of jobs in India, according to a 2016 World Bank report. Executive search firm Head Hunters India estimates that 175,000 to 200,000 technology jobs will be lost in the country each year through 2020, as per sources.

“Hiring momentum remains slow,” NASSCOM, which represents India’s $154 billion information technology and business-process management industry, said in its review for the April-June quarter. However incremental revenue was the strongest in four years and global activity is recovering, it said.

Infosys is India’s second-largest software exporter. Started in 1981 by seven engineers, it’s now a company with a net profit of $2 billion and revenue of over $10 billion this year and almost 200,000 employees — mainly based in Bengaluru, India’s Silicon Valley.

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