Outsourcing specialist Infosys has cut forecasts by a third and has ended its battle with HCL to buy UK-based Axon.

Dependence on providing services to the US financial sector led Infosys to reduce estimates for next quarter. The firm still expects growth of between 8.4 per cent and 12.6 per cent for the quarter ending December 31 2008. For the fiscal year ending March 31 2009 Infosys predicts revenues of between $4.72bn and $4.81bn - year on year growth of between 13.1 per cent and 15.2 per cent.

Infosys offered just over £400m to buy SAP specialist Axon Group. Ten days ago HCL trumped this with an offer of £441m. Given SAP's profit warning last week and the global credit and stock market crisis, that Infosys walking away from the deal is not surprising.

V Balakrishnan, CFO at Infosys, said that given the due diligence and the global environment the firm saw no reason to increase its offer for Axon, meaning HCL will now win control of the company.

Revenues for the second quarter ended 30 September were up 19 per cent at $1.216bn. Earnings per share were 56 cents, up 16.7 per cent. Net profit was up 17.3 per cent to $318m.

Infosys and its subsidiaries gained 10,117 staff in the quarter, giving a total of 100,306. It expects to hire another 4,500 in the third quarter.

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