Shares of Tata Consultancy Services Ltd., India’s largest software services company by revenue, took a beating Monday after warning of slackening demand among financial services clients, the company’s biggest business segment. Shares fell 90 rupees at close of trading in Mumbai, or nearly 3.7 percent, to 2,365 rupees from 2,455 rupees at Friday’s close.

Demand in North America and Britain -- the Indian IT outsourcing provider’s largest markets -- will also be affected by “seasonal weakness” as well as because of cuts in spending by clients in the insurance sector, TCS had said in a statement on Friday, after market hours. The seasonality refers to fewer working days in the holiday season and furloughs that are seen as reducing the number of billable days of work during the October-December quarter.

“Q3 is a seasonal quarter, and our revenue is going to reflect, unfortunately, the negativity of this seasonality, Rajesh Gopinathan, TCS’s chief financial officer, told analysts Friday.

Manik Taneja, an analyst at Mumbai brokerage Emkay Global Financial Services, said in a note, after the briefing: “TCS’s slight cautiousness on demand (indicating that ‘demand momentum has seen some slackening in recent months’) coupled with weak revenue performance in Dec’14 quarter will drive revenue downgrades for TCS as well as the sector as a whole.” 

While the underlying macro-level reasons for growth in Indian IT companies' outsourcing business remain strong, TCS’s commentary suggests that prospects for strong acceleration in demand seem increasingly remote. Heading into its last quarter of the current fiscal year, which ends March 31, the $118 billion outsourcing industry is not likely to grow faster than last year, Taneja said.

Referring to the analyst briefing, Taneja wrote in the note: “TCS’s indication of ‘relative mutedness’ in constant currency revenue growth is a tad disappointing.” While the company didn’t give any detailed outlook for the calendar year 2015 or the fiscal year 2016 that ends Mar. 31, 2016, TCS indicated some “demand slackening in recent months,” the analyst wrote.

“This in our view poses downside risks to growth estimates not only for TCS but for the sector as a whole,” he said in the note.

Sales to financial clients, accounting for over 40 percent of the company’s revenue, “continues to be impacted by weakness in insurance and products,” TCS said, in a statement to the Bombay Stock Exchange. North America accounts for more than half of the company’s revenues. Demand for its services to retail, manufacturing and technology clients could also be affected, the company added in its statement. 

TCS will report its December-quarter earnings on Jan. 15, according to its website.