India's top IT firm TCS on Tuesday  said it does not see any weakening of demand in the overseas markets, contradicting brokerage firm CLSA's report which has downgraded the country's software services sector.
"...on the matter of macro worries, we are not seeing any weakening of demand. Clients continue to fund new projects and ramp-ups are proceeding smoothly,"
Tata Consultancy Services said in a communique to investors, a copy of which has been seen by PTI.

CLSA downgraded TCS and Infosys to "underperform" from "outperform" on Monday, citing weaker revenue outlook and US visa issues. It also downgraded the overall software sector to "underweight" from "neutral".  However, Infosys comments could not be ascertained.

The note from the brokerage firm had led to sharp market reaction, pulling the IT stocks. Meanwhile, TCS further stated that higher scrutiny of visa applications and increased rejection rates have been an ongoing feature of the US visa process for over a year and that software industry lobby group Nasscom was working on addressing the issue.

"IT body Nasscom is working with the US embassy to work out a set of standards to address this problem. Until that is fully implemented, this will remain an irritant but it is neither sufficiently disruptive nor an incremental negative to justify a sudden sector downgrade," the TCS note said.

India's export-driven software services companies send a large number of staff every year to the US, their biggest export market, using short-stay visas to work at client locations.

CLSA had said the visa rejection rate in the US was running at about 40 per cent, up from 5 per cent 18 months ago, and could make Indian IT companies unable to staff projects on time.