India's Tata Posts Strong Revenue Growth in Tough Times
Tata Consultancy Services, India's largest outsourcer, posted strong revenue in the quarter ended Dec. 31, with growth across all its markets including Europe, which is being hit by a debt crisis.
"We have signed 10 large deals in the quarter," N. Chandrasekaran, CEO of the company, told reporters in Mumbai on Tuesday at a briefing that was also webcast. "On the ground, things seem to be going well for us," he added.
TCS said that its revenue in the quarter was US$2.6 billion, up by 20.6 percent in the same quarter in the previous year. The company's net profits at $568 million were up 9.1 percent.
Competitor Infosys in contrast cut its revenue growth forecast last week for its fiscal year ending March 31, citing slowing demand in Europe.
The overall market is challenging and companies are taking time to finalize their budgets, said Sudin Apte, principal analyst and CEO of Offshore Insights, a research and advisory firm in Pune, India.
But companies have responded differently to the crisis. TCS has been able to adapt to offer better value to customers in terms of prices, domain capabilities and a stronger focus on the customers' business, he added.
TCS added 11,981 employees in the quarter, taking the total number of staff at the end of December to 226,751. The company plans to add 15,000 staff in the current quarter. It also added 40 new clients in the quarter.
The flow of new deals is good, but customers will exercise higher due diligence on discretionary expenditures, which could lead to delays in decision making, Chandrasekaran said. The company does not expect a dramatic change in the prices it is able to get for its services.