Are tighter IT budgets hitting the Indian IT outsourcing sector? Looks that way.

Sataym Computer Services (SAY) reported first quarter results which missed Street expectations; the company also reported that margins would be flat to down 50 basis points in the March 2009 fiscal year.

Meanwhile, Tata Consultancy Services (which trades on India’s National Stock Exchange) likewise reported March quarter results that were below expectations.

According to Reuters, Tata COO N. Chandrasekaran said that some financial clients in the U.S. “had had difficulties,” but that its deal pipeline is “encouraging.”

Satyam today is down $1.50, or 5.7%, to $24.79.