Infosys Technologies, India's second largest outsourcer, Friday reported slower growth in revenue and profits for the quarter ended September 30, reflecting the impact of the economic crisis in the U.S., its largest market.

Infosys also revised its U.S. dollar revenue guidance, citing the current economic situation and the drastic depreciation of major global currencies against the U.S. dollar.

Revenue for the company's fiscal year ending March next year is now expected to be in the range of $4.72 billion and $4.81 billion, with year-on-year growth of 13.1% to 15.2%, and 16% to 18% in constant currency

It forecast in July that revenue for the fiscal year was expected to be in the range of $4.97 billion and $5.05 billion, with year-on-year growth of between 19% and 21%.

Infosys also announced Friday that it would not increase its bid for Axon Group, an SAP consultancy in the U.K. HCL Technologies, another Indian outsourcer, announced in September that it has made a cash offer for Axon that values its entire issued and to-be-issued share capital at £441.1 million] ($817 million). Infosys had in August made a cash offer to acquire Axon in a deal valued at £407.1 million.

For the quarter, Infosys reported revenue of $1.216 billion, up 19% from the corresponding quarter last year. Profits grew by 17.22% to $320 million.

The growth is far slower than the 37% revenue growth and 36 percent profit growth the company had reported in the second quarter a year ago.

Revenue growth in rupees was however higher at 32% in the quarter because of the appreciating U.S. dollar. Profit growth was 30% in rupees for the quarter.

The company's results for the quarter are in accordance with International Financial Reporting Standards (IFRS). It previously reported according to U.S. GAAP ( Generally Accepted Accounting Principles).

The National Association of Software and Service Companies (Nasscom) has said that the crisis in the financial services sector in the U.S. will have an impact on Indian outsourcers in the short term.

Analysts such as Forrester Research have forecast that the impact could be longer, as the financial services sector goes through a period of restructuring. About 15% to 18% of the business coming to Indian outsourcers from banking, insurance, and the financial services sector is now uncertain, Forrester said.

The IDG News Service is a Network World affiliate.