Tata posts strong revenue, profit growth, signaling recovery

The appreciating rupee is however still a concern for Indian outsourcers

Tata Consultancy Services (TCS) signaled a stable recovery for Indian outsourcers when it reported on Monday strong revenue and profit growth in dollar terms for the quarter and fiscal year ended March 31.

TCS, India's largest outsourcer, as well as other services vendors like Infosys Technologies, were hit for a large part of last year by the economic recession.

TCS said that its revenue for the quarter ended March 31 was US$1.7 billion, up by 17.6 percent from the same quarter in the previous year. Profit was up 60 percent to $420 million.

The company has registered revenue growth in all the industry segments in which it operates, said N. Chandrasekaran, the company's CEO and managing director, at a press briefing in Mumbai.

For its fiscal year ended March 31, the company posted revenue of $6.34 billion, up by 5.38 percent from the previous year. Profit was up 29 percent to $1.45 billion.

The results are in accordance with U.S. GAAP (generally accepted accounting principles).

It may be back to business as usual for Indian outsourcers, analysts said. Infosys, the country's second largest outsourcer, also reported earlier this month a growth in profit and revenue in dollar terms for the quarter.

The company said that revenue for the quarter ended March 31 was US$1.3 billion, up 15.6 percent from revenue in the same quarter a year ago. Profit increased by 8.7 percent to $349 million. The company forecast that revenue for its fiscal year ending March 31, 2011 will be in the range of $5.57 billion and $5.67 billion, after year-on-year growth of 16 percent to 18 percent.

Worldwide spending on IT services is expected to reach $821 billion in 2010, up 5.7 percent from 2009, Gartner said earlier this month.

The market for outsourcing has improved, but it is too early to predict a return to the boom time before the recession for Indian outsourcers, said Siddharth Pai, a partner at outsourcing consultancy firm Technology Partners International (TPI).

Customers are looking at outsourcing options including offshoring, primarily with an eye to cut down costs, Pai said. They haven't started investing in automation and new technologies in a big way for business or revenue growth, he added.

There is also concern that as companies resume large-scale hiring in India, there will be a return to the spiraling salaries before the recession. TCS, for example, added 10,775 new staff in the quarter ended March 31. The company has made offers to 20,000 students in campuses for the fiscal year ending March 31, 2011, and is also planning increments for its staff in India, said Ajoy Mukherjee, TCS' vice president and head of global human resources.

These new staff additions by Indian outsourcers may not however push up salaries in the short term, as there are still students who graduated in 2009 that have not been absorbed by the IT sector, Pai said.

Just as challenging for Indian outsourcers is the appreciation of the Indian rupee against the U.S. dollar and some European currencies. Most of the revenue of Indian outsourcers comes from Europe and the U.S. A strong rupee reduces the money available to Indian outsourcers for spending on staff and facilities offshore in India.

While the rupee appreciated by 2 percent against the dollar in the quarter ended March 31, the appreciation was higher at about 7 percent against some European currencies, said S. Mahalingam, TCS' chief financial officer. The company improved its margins by trimming costs and getting more efficient, he said.

Join the PC World newsletter!

Error: Please check your email address.

Tags it servicesindian outsourcingfinancial resultsTata Consulting Serviceshiring

Our Back to Business guide highlights the best products for you to boost your productivity at home, on the road, at the office, or in the classroom.

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

John Ribeiro

IDG News Service
Show Comments

Cool Tech

Crucial Ballistix Elite 32GB Kit (4 x 8GB) DDR4-3000 UDIMM

Learn more >

Gadgets & Things

Lexar® Professional 1000x microSDHC™/microSDXC™ UHS-II cards

Learn more >

Family Friendly

Lexar® JumpDrive® S57 USB 3.0 flash drive 

Learn more >

Stocking Stuffer

Plox Star Wars Death Star Levitating Bluetooth Speaker

Learn more >

Christmas Gift Guide

Click for more ›

Most Popular Reviews

Latest News Articles


GGG Evaluation Team

Kathy Cassidy


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

Anthony Grifoni


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

Steph Mundell


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


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


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.

Featured Content

Latest Jobs

Don’t have an account? Sign up here

Don't have an account? Sign up now

Forgot password?