One of India’s largest outsourcing firms, Infosys Technologies stated it remains cautious about technology and BPO spending, but is seeing a bottom in demand, reported The Wall Street Journal. Infosys is the second biggest outsourcer in India by revenue.

The chief of North America capital markets and banking at Infosys, Shaji Farooq, commented in an online WSJ report that “things were not as bad as they were” but he had not seen a clear improvement in demand. He also noted that it is unlikely that an explicit spike in IT spending will occur in the near-term.

Farooq added that the outsourcing giant needs to carefully observe where the market is headed in the next six months before pursuing a firm direction. He was speaking on an Oppenheimer analysts’ conference call.

It appears that sales teams are approaching clients with price cuts to further entice them into outsourcing, reports the Inquirer. The bottoming of demand is supported by these rate reductions.  However, this means that Infosys and other outsourcing companies have smaller profit margins.

SD Shibulal, COO of Infosys, explained that the outsourcing firm founded by Narayana Murthy is impacted by pricing pressures. Although this might be good for Indian software developers, it will put more pressure on onshore employees.