India’s outsourcing sector is bracing for fresh uncertainty and lowered earnings expectations after an unexpected drop in quarterly profit at Infosys, the country’s second-largest IT group.

Infosys, a pacesetter in India’s flagship outsourcing industry and the first to issue quarterly results, on Tuesday reported a 2.4% fall in net profit in the first quarter of this fiscal year compared with a year ago. Revenue from Europe, which comprised about 20% of Infosys’s business, declined 12%. “Europe is very important for us,” said S.D. Shibulal, Infosys chief operating officer. “We expect that Europe will be eventually about one-third of business in the long run. At the same time, we expect some challenges in the medium term.”

Source: Financial Times

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