Shares in India's biggest IT services firm, Tata Consultancy Services (TCS), have tumbled after it missed analysts' profit targets for its last quarter.
TCS, part of the conglomerate Tata Holdings, saw its shares drop 10% on fears that some of its biggest US clients are cutting their IT budgets.
It is thought this stunted the firm's January to March period when net income rose 7% to 12.56bn rupees ($314m).
But the firm was upbeat with plans to grow outside the slowing US economy.
"It is obvious that the company had few clients delaying their projects in the recent months"
"We are confident of our growth prospects in 2009," said chief executive S Ramadorai.
"We will continue to be watchful of the external environment, especially the US market."
Growing pains
TCS - and its smaller rivals Wipro, Infosys and Satyam - have blossomed as US multinationals have shifted services, including complex back-office IT functions, to India because of the comparatively low costs and wealth of English speakers.
Its profits have helped to strengthen the finances of its parent Tata Holdings, which recently bought Ford's British luxury subsidiaries Jaguar and Land Rover and has business interests ranging from steel mills and power generation to tea.
But analysts say there are now signs that the boom is petering out as rising household bills and tighter lending conditions are strangling the US economy and forcing companies to delay spending plans.
"The numbers are quite disappointing," said Harit Shah, a sector analyst with Angel Broking.
"Its peers have recorded much better performance in the quarter. It is obvious that the company had few clients delaying their projects in the recent months," he added.
Others say that the gains in the rupee and wage growth could also hurt future earnings.
By lunchtime in Mumbai, its shares were down 95.9 rupees to 897.6 on the main Sensex index, hurting sentiment in the sector.
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