Tata revenue down, profits up in tight market

The company said a full bounce back in revenue growth rates for outsourcing is still some time away

India's largest outsourcer, Tata Consultancy Services (TCS), reported on Friday a fall in revenue, but growth in profit, in U.S. dollar terms for the quarter ended Sept. 30, indicating that the outsourcing market is still difficult.

The company said that there is an improvement in market conditions, but cautioned that discretionary spending on IT and related services is still tight.

Spending in some sectors like manufacturing, telecommunications and IT is recovering very slowly, said N. Chandrasekaran, the company's CEO and managing director at a webcast press briefing in Mumbai.

"Don't expect a sudden bounce back in growth rates," Chandrasekaran said.

TCS' revenue for the quarter was $US1.54 billion, down by 2.3 percent from a year earlier in dollar terms. Revenue grew higher by 6.9 percent in Indian rupees mainly because of currency fluctuations.

The company was able to improve margins, despite pressure on billing rates for services, by moving more work offshore to India, improved utilization of staff and a continuous cost cutting program, Chandrasekaran said.

As a result, profit in the quarter, at $US336 million, was up 8 percent in U.S. dollars from a year earlier, and 29.2 percent in rupee terms.

Infosys Technologies, India's second largest outsourcer, reported earlier this month a decline in revenue and profit in U.S. dollar terms for the quarter, but the results were better than was forecast by the company in July.

Infosys' revenue for the fiscal year ended March 31 is forecast to be in the range of $US4.6 billion to $US4.62 billion, down by 1.0 percent to 1.3 percent from a year ago. The decline is however smaller than the 3.1 percent to 4.6 percent decline the company forecast in July. TCS does not provide guidance for the quarters ahead.

TCS added 320 staff during the quarter. The company said it would be adding 8,000 staff in this quarter, to prepare for an anticipated recovery. It added 30 clients in the quarter.

Tags outsourcingTata Consulting Services

Keep up with the latest tech news, reviews and previews by subscribing to the Good Gear Guide newsletter.

John Ribeiro

IDG News Service

Comments

Comments are now closed.

Most Popular Reviews

Follow Us

Best Deals on GoodGearGuide

Shopping.com

Latest News Articles

Resources

GGG Evaluation Team

Kathy Cassidy

STYLISTIC Q702

First impression on unpacking the Q702 test unit was the solid feel and clean, minimalist styling.

Anthony Grifoni

STYLISTIC Q572

For work use, Microsoft Word and Excel programs pre-installed on the device are adequate for preparing short documents.

Steph Mundell

LIFEBOOK UH574

The Fujitsu LifeBook UH574 allowed for great mobility without being obnoxiously heavy or clunky. Its twelve hours of battery life did not disappoint.

Andrew Mitsi

STYLISTIC Q702

The screen was particularly good. It is bright and visible from most angles, however heat is an issue, particularly around the Windows button on the front, and on the back where the battery housing is located.

Simon Harriott

STYLISTIC Q702

My first impression after unboxing the Q702 is that it is a nice looking unit. Styling is somewhat minimalist but very effective. The tablet part, once detached, has a nice weight, and no buttons or switches are located in awkward or intrusive positions.

Latest Jobs

Don’t have an account? Sign up here

Don't have an account? Sign up now

Forgot password?