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Although City were 1-0 up at half-time in the match at the AJ Bell Stadium, three Derby goals in the second half saw City fall to their third Premier League Cup defeat of the campaign.
Davies said: “Unfortunately, there’s been an injury to Erik which we hope isn’t going to be too bad but the early signs don’t look great.
“All the lads and the staff really feel for him as he’s just been getting back into it and training well so to get this injury isn't nice. I think that had a big effect on the boys because they came in and saw him at half-time.”
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Having changed the formation from 4-3-3 to 3-2-4-1 once Sarmiento was withdrawn, Davies elected to return to his original set-up for the second half.
He said: “We’ve done a lot of work in our normal shape so we wanted to return to that in the second half. The second half performance was a total surprise to me because I thought we applied ourselves well in the first half and created a lot.”
With a number of matches across the week, Davies had the opportunity to give a number of younger players a go in an U23s match and he was impressed.
He said: “These opportunities are helping us to learn more and more about our young players. Joe Hardy played almost 80 minutes and got a goal, Colin Rosler had an excellent match and Ian got to show a bit of what he can do, he’s a very talented player.”
Manchester City travel to Leicester City in the Premier League 2 on Monday 30 January. Head to the ticket office for more information on how you can support our future at home matches.
Manchester City will face Derby County on Wednesday evening and here’s all you need to know ahead of the Premier League Cup tie.
Read what happened as Simon Davies' side travelled to the Weston Homes Community Stadium to face their Colchester United counterparts...
Read what happened as Simon Davies' side hosted Tottenham in Premier League 2