Tata revenue and profits up as outsourcing market improves

The company is hiring more staff in India and abroad
  • (IDG News Service)
  • — 16 January, 2010 01:24

India's largest outsourcer, Tata Consultancy Services (TCS), reported Friday an increase in revenue and profit in U.S. dollar terms for the quarter ended Dec. 31, reflecting a turnaround in the offshore outsourcing market.

TCS said that its revenue had grown by 10.3 percent to US$1.64 billion in the quarter from the same quarter in the previous year. Its profit grew by 39 percent to $384 million.

The company's results are in compliance with U.S. GAAP (Generally Accepted Accounting Principles).

The company's revenue was down by 2.3 percent in the previous quarter ended Sept. 30, but profit was up 8 percent.

"Growth has come across the board, across geographies, and industries," said N. Chandrasekaran, the company's CEO and managing director at a press briefing that was also webcast.

TCS added 32 clients in the quarter, taking the total to 917. The company is also pursuing at least 20 large deals in the current quarter, Chandrasekaran said.

India's outsourcing industry is recovering, though it will take some time for the top companies to achieve the revenue growth of over 30 percent that they had up to early 2008, before the impact of the recession, analysts said.

Most of the business to Indian outsourcers is still necessary or maintenance expenditure, with discretionary spending on IT likely only by the middle of this year, said Diptarup Chakraborti, principal research analyst at Gartner.

Infosys Technologies, India's second largest outsourcers, reported on Tuesday that its revenue in U.S. dollar terms for the quarter ended Dec. 31 had grown by 5.2 percent from the same quarter in the previous year. Profit growth was however flat at 0.6 percent. The company had posted a decline in revenue and profit growth in the previous quarter.

Indian outsourcing companies are however grappling with a rising rupee against the U.S. dollar and the U.K. pound. A large proportion of their expenses are in rupees on staff and facilities in India.

TCS' revenue grew in rupee terms by 5.1 percent in the quarter. Profit growth was however higher at 34 percent, because of aggressive cost cutting by the company, and higher delivery of services offshore from India, said S. Mahalingam, the company's chief financial officer.

The company has also postponed wage hikes, which will now be considered after April, said Ajoy Mukherjee, TCS' head of human resources.

Anticipating a further recovery, TCS added 7,692 staff in the quarter to Dec. 31, taking the total staff at the end of the quarter to 149,654. The company plans to hire about 8,000 trainees and about 3,000 experienced staff in the current quarter.

TCS plans to add staff at both its offshore facilities in India, and at facilities closer to clients in other countries, including in the U.S., Chandrasekaran said. Currently, 92.6 percent of the company's staff are Indians.

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

John Ribeiro

IDG News Service
Topics: indian outsourcing, Tata Consulting Services
Comments are now closed.

Latest News Articles

Most Popular Articles

Follow Us

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.

Resources

Best Deals on GoodGearGuide

Compare & Save

Deals powered by WhistleOut
WhistleOut

Latest Jobs

Don’t have an account? Sign up here

Don't have an account? Sign up now

Forgot password?