Tata reports strong revenue and profit growth despite uncertain market

The outsourcer expects the current fiscal year to be better than the previous one

India's Tata Consultancy Services reported strong first quarter revenue and profit growth, despite indications that the outsourcing market is still uncertain.

The country's largest outsourcer said its revenue in the first quarter increased by 14.8 percent year-on-year to US$3 billion. Net profit of $663 million in the quarter was up 13 percent from last year.

The company continues to invest in products, platforms and intellectual property relevant to its customers, said CEO and managing director N. Chandrasekaran. The company has applied for 1,280 patents, and bagged 81 so far.

Last week, India's second largest outsourcer, Infosys, said there was "volatility" in the outsourcing market while reporting that profit fell by about 4 percent year-on-year to $444 million, even as revenue grew 9.4 percent to $1.9 billion. Infosys said customers are still delaying purchase decisions.

There is a long-term return to growth in the outsourcing business, though not as high as before the 2008 financial crisis, with dramatic shifts from one quarter to another, said Siddharth Pai, president for Asia-Pacific for Information Services Group.

The research and consultancy firm reported earlier this month that annual contract value of outsourcing deals clinched in the first quarter totaled $3.9 billion, a decline of 27 percent from the first quarter of 2012. ISG reports on deals that have an annual contract value of $5 million and above.

Although Indian outsourcers offer similar services ranging from bespoke software development to system integration to consulting, TCS outstrips competitors in a difficult market because of its large number of employees and the geographies it covers, said an analyst who declined to be named. "By its size and spread, the company is less vulnerable to market shifts," he added.

For the fiscal year ended March 31, TCS reported revenue growth of about 14 percent to $11.6 billion, while profit grew 15.6 percent to $2.6 billion.

The company has a strong pipeline of deals and expects to do better in the current fiscal year, Chandrasekaran said.

TCS added 12,559 staff in the quarter, taking the company's total to 276,196 employees.

During the quarter, it settled for $30 million a class-action suit filed relating to payments of its Indian employees sent to work on projects in the U.S.

John Ribeiro covers outsourcing and general technology breaking news from India for The IDG News Service. Follow John on Twitter at @Johnribeiro. John's e-mail address is john_ribeiro@idg.com

Join the newsletter!

Or

Sign up to gain exclusive access to email subscriptions, event invitations, competitions, giveaways, and much more.

Membership is free, and your security and privacy remain protected. View our privacy policy before signing up.

Error: Please check your email address.

Tags outsourcingbusiness issuesservicesfinancial resultsTata Consultancy Services

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

Brand Post

Most Popular Reviews

Latest Articles

Resources

PCW Evaluation Team

Tom Pope

Dynabook Portégé X30L-G

Ultimately this laptop has achieved everything I would hope for in a laptop for work, while fitting that into a form factor and weight that is remarkable.

Tom Sellers

MSI P65

This smart laptop was enjoyable to use and great to work on – creating content was super simple.

Lolita Wang

MSI GT76

It really doesn’t get more “gaming laptop” than this.

Jack Jeffries

MSI GS75

As the Maserati or BMW of laptops, it would fit perfectly in the hands of a professional needing firepower under the hood, sophistication and class on the surface, and gaming prowess (sports mode if you will) in between.

Taylor Carr

MSI PS63

The MSI PS63 is an amazing laptop and I would definitely consider buying one in the future.

Christopher Low

Brother RJ-4230B

This small mobile printer is exactly what I need for invoicing and other jobs such as sending fellow tradesman details or step-by-step instructions that I can easily print off from my phone or the Web.

Featured Content

Don’t have an account? Sign up here

Don't have an account? Sign up now

Forgot password?