The downturn in the US economy and the hike in oil prices may have affected India's second largest outsourcer, Infosys Technologies.
The company reported on Friday that its revenue for the quarter ended 30 June was $1.16 billion (£586m), up by 24.5 percent from the same quarter in the previous year. Profits grew by 16 percent to $306 million.
However, although both revenue and profit are up, both are far lower than the growth in 2007, when the company reported 40.6 percent revenue growth and a 51 percent increase in profits for the April to June quarter.
Infosys' results are in compliance with US GAAP (Generally Accepted Accounting Principles). The company's profit and revenue growth was a little higher under the Indian GAAP, which the company reports in Indian Rupees, because of the depreciation of the rupee against the dollar in the quarter.
The global economic environment remains uncertain and could impact IT spending in the short term, the company said. But it still sees several opportunities for growth as customers focus on improving efficiency.
The second and third quarters of this calendar year are likely to be difficult for Indian outsourcers, with higher uptake from customers abroad coming after that, according to analysts.
Infosys has forecast that its revenue for the fiscal year ending March 31 next year will be in the range of $4.97 billion (£2.51 billion)and $5.05 billion (£2.55 billion), up by between 19 to 21 percent from the previous year.
India's National Association of Software and Service Companies (Nasscom) sounded warning bells earlier this week when it said that India's software and services revenue this year would grow by 21 to 24 percent, in contrast to 28 percent in the previous year.
Infosys added 49 new clients and 3,192 employees during the quarter taking the total number of employees as on June 30 to 94,379.
Infosys and other Indian outsourcers compete with multinational services companies such as Accenture and IBM which have set up offshore services delivery centers in India to take advantage of the lower cost of staff in the country.
Tata Consultancy Services, India's largest outsourcer, and Wipro, India's third largest outsourcer will be announcing next week their results for the quarter.
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