Infosys CEO Vishal Sikkha said possibility of more contracts being cancelled were imminent, following cancellation a recent deal with the Royal Bank of Scotland. Speaking at an investor meet in Pune, last week, Sikka said, "We are seeing softness in some clients post Brexit which was not anticipated in the beginning of the quarter. We want to see if RSB is as one-off case or there are more like RBS."
Earlier this month, the bank had cancelled a five-year contract with Infosys after it abandoned its plan to float a separate standalone UK bank Williams & Glyn. The contract will impact as many as 3,000 Infosys employees and is expected to impact revenues this financial year by at least $40 million. One brokerage house expects it to be in the range of $50-100 million. Infosys is looking to offset the RBS contract with other orders such as the one it got from the Indian government to build the tech network for GST. The company had a relatively disappointing first quarter, and was hoping to make up to some extent in subsequent quarters. "We have another five weeks of execution until the end of the quarter, so clarity on the guidance will only come in October," Sikka said. In July, after the Q1 performance came in, Infosys lowered its revenue growth guidance for the current year to 10.5-12 per cent, from 11.5-13.5 per cent it provided in April.
Cognizant has lowered revenue guidance twice this financial year. Sikka said on the positive side the company has been able to arrest some of the execution-related concerns that pulled down performance in the June quarter.
