Tata Posts Strong Revenue Growth Despite Economic Conditions
India's largest outsourcer, Tata Consultancy Services, reported on Monday strong revenue and profit growth in the quarter ended Sept. 30, despite difficult economic conditions in some of its key markets in the U.S. and Europe.
The company witnessed significant growth across all major markets, led by the U.K., the rest of Europe and North America, Tata said. Among new growth markets, Asia Pacific and the Middle East and Africa continued to grow strongly, it added.
Tata's revenue was US$2.52 billion in the quarter, up 26 percent from the same quarter last year, in accordance with international financial reporting standards. Net profit was up 15 percent at $528 million.
The company saw an improvement in operating margins, largely due to currency fluctuations, said Dipen Shah, head of fundamental research at stock brokerage Kotak Securities, in a statement.
The Indian rupee has been falling against the dollar, making more rupees available to Indian outsourcers for expenses in India, where they have most of their staff and facilities.
Tata's competitor Infosys reported last week 16.7 percent growth in revenue and 9.9 percent growth in net profit, but lowered slightly its U.S. dollar revenue forecast for the fiscal year ending on March 31, citing currency fluctuations among other reasons.
The quarter's growth came from all the industries Tata targets as customers, except for telecommunications, said CEO and managing director N. Chandrasekaran at a webcast press briefing.
Customer orders have been strong, he said. Despite the economic conditions, the company is getting "positive vibes" from customers who want to drive efficiency in their operations, he added.
Indian outsourcers have started hiring staff in large numbers again in anticipation of business growth. TCS added 12,580 employees in the quarter, taking the total to 214,770.
It added 35 new clients in the quarter, bringing the total number of active clients to 1,010.