Analysts will be watching for comments on hiring targets, pricing and demand, sifting for signs the financial crisis has begun paralysing outsourcing that has been the sector's life-blood.

India's export-oriented IT firms get over half of their revenues from the United States, and the battered banking and financial sector there provides them some of their top clients.

"The ongoing consolidation in the financial services industry would lead to shrinkage in IT budgets, increasing the odds of price wars amongst IT vendors struggling to retain their revenue bases," analysts at JM Financial wrote in a note to clients.

The concerns have hammered the BSE IT index down 23 per cent between July and September, a drop far worse than the broader index's 4.5 per cent fall.

Results this quarter will be dominated by an 8.3 per cent drop in the rupee against the dollar between July and September, which is seen boosting rupee revenues.

Gains in profits could be limited by losses on hedges the firms took against an appreciating rupee in 2007, when a 12 per cent gain had trimmed revenues and profits.

UNMET TARGETS THIS YEAR ?

While analysts did not expect the crisis to hurt companies this quarter, they said firms might not meet fiscal year 2009 financial targets.

Hiring, an indicator of expected projects and revenue, had slowed down and employee addition was seen subdued in the next few quarters, they noted.

"(An) increasing number of firms are admitting lower-than-expected hiring, pricing pressures, contract delays and revenue misses," Credit Suisse analysts wrote about India's smaller IT companies in a note on to clients.

India's IT services growth could be pruned from the forecast 21-24 per cent expansion to about $50 billion in the year to March, the National Association of Software and Service Companies said last month.

"Is guidance at risk? Yes, we think so," analysts at Edelweiss Securities wrote in a note.