Tata Consultancy Services (TCS), India's largest outsourcer, reported on Friday that revenue was stagnant, but profit grew marginally in U.S. dollars, reflecting the impact of the recession on Indian outsourcers.
The company's revenue for the quarter ended June 30 was US$1.48 billion in comparison with $1.5 billion in the same quarter last year. Profit grew by 5 percent to $311 million.
The company's results are in compliance with U.S. GAAP (Generally Accepted Accounting Principles).
TCS did a lot better in the quarter in rupee terms under Indian GAAP. Revenue in Indian rupees was up 12.4 percent, while profits were up 18.8 percent.
The global economy continues to be weak, and could still hold surprises, said S. Ramadorai, CEO and managing director of the company.
The company has cut down on overseas expenditure in the quarter, and moved more clients' work offshore to India to reduce costs, said S. Mahalingam, chief financial officer of the company.
The company won eight large deals in the quarter including five in the U.S., and two in Europe, said N. Chandrasekaran, chief operating officer of the company.
TCS and other Indian outsourcers face a difficult market as their customers in the U.S. and other countries delay decisions on new outsourcing contracts, analysts said.
India's second largest outsourcer, Infosys Technologies, said last week that it expects a revenue decline between 3.1 percent and 4.6 percent for its fiscal year ending March 31, 2010. Infosys also reported a decline in revenue, and a marginal increase in profits for the quarter ended June 30.
India's revenue from offshore outsourcing will likely grow by below 10 percent in U.S. dollar terms in the Indian fiscal year to March 31, 2010, Som Mittal, president of the National Association of Software and Service Companies, said on Tuesday.
The forecasted growth will be lower than an estimated 14 percent to 16 percent growth in the year to March 31, 2009, and far lower than in the year to March 31, 2008, when revenue from offshore outsourcing grew by 29 percent.
TCS said it had reduced its staff by 2,746 during the quarter as a cost-cutting measure. The company added 4,895 staff in the same quarter a year ago.