The $76-billion Indian IT sector is projected to grow at 15-20% this fiscal. However, the global economic situation has started to take its toll on the industry which gets 98% of its revenues from exports. Infosys, the country?s second largest technology firm, had recently said that it would not be meeting the upper end of its revenue guidance for the current quarter. V Balakrishnan, chief financial officer, Infosys, tells FE?s Shreya Roy about the firm?s challenges with new business and client spends, potential pitfalls in the next quarter, and how it plans to ride the storm.

The US and Europe, Indian IT?s biggest markets, have been grappling with economic crises through out the year. Would you say the industry has coped well with the situation?

The industry should be able to grow at least 15 ? 20% this year. It is a good growth, considering the deep turmoil in the global economy. It is still profitable, and there is no doubt that IT has done a lot better than most industries. Next year will be a challenge. But the industry always gets through challenges.

Earlier this month, Infosys said that it will not be able to meet the upper end of its guidance. Is there an indication of pressures on the pricing front and on client spend?

For this quarter, we had given a wide range of growth at 3-5% due to the global uncertainties. When we started the year, we were encouraged by the fact that customers had budgets. But as we went through the year, we found that customers started becoming more cautious and things have become incrementally negative. The momentum of new business has come down drastically through the year. Which is why we came out and stated that the we will only be meeting lower end of the guidance.

But we are not seeing any cancellation of projects. Pricing is still stable. But the momentum has come down drastically,

As the year comes to a close, you will enter a phase where visibility into client budgets will be much better. What are your expectations?

Typically clients finalise the budget in January. But if the environment becomes bad, some of them will postpone, like what happened in 2009. Even if budgets are finalised on time, the actual spend will be a question. While we will have visibility into budgets, there will be no great visibility on the spending. Next year is going to be a very challenging year. It could be similar to 2008-09. Growth could be slower.

Has client addition slowed down compared to previous quarters?

Client addition has remained strong. Even last quarter we have added around 40 clients. The challenge is how far they spend the budget. Earlier, for larger deals, clients would commit upfront, but today they break it up into smaller pieces. So the momentum comes down.

What are you doing to ensure margins are maintained?

We run the company the same way in good and bad times. Cost control is something we do at all times. We have to work more closely with the clients, identify where the chinks are and try to see how we can use technology better to iron those out. Some of the markets like India are growing so we will be focusing our attention a lot more on it.

In the beginning of the quarter, you had made a hiring guidance of 8000. Are you anticipating a slowdown in hiring as well for the coming quarters?

We are on target with our hiring because whatever we hire from now on is for next year. We are going to keep going with our hiring plans, because there will still be growth. Even for next year we have given around 25,000 campus offers. Our lateral hiring may be fine tuned, but freshers will continue as planned.

What are your expansion plans outside of India?

We plan to hire at least 1,200 in the US in the next 12 to 18 months and we are on target for that. Every quarter we hire around 200-250 people there. We are expanding in Mexico, China, Brazil. Even India is developing into a big market so we will continue to ramp up here. Currently 30% of total employees are outside India.