Tata revenue, profit boosted by strong outsourcing market

The Indian outsourcer saw growth across key industries and markets it addresses

Tata Consultancy Services posted strong revenue and profit growth in the second quarter, taking advantage of an uptick in the outsourcing market.

Revenue growth in the quarter came from all the industries the company addresses, except the insurance segment, which saw muted growth, TCS CEO and Managing Director N Chandrasekaran told reporters Thursday.(

TCS also had strong demand from key markets like North America, Europe and the Asia-Pacific region.

The company had revenue of close to US$3.7 billion in the quarter, a year-over-year increase of 16.7 percent, according to IFRS (International Financial Accounting Standards). Net profit was $845 million, up by 20.5 percent from the same quarter last year.(

The company's margins have stayed steady despite the appreciation of the rupee and a 10 percent wage hike, Chandrasekaran said. The company added 4,967 staff in the quarter, taking the total to 305,431 at the end of the quarter.

TCS, which is India's largest outsourcer, is benefiting from a rebound in the outsourcing industry, reflected in the signing of many new contracts.

Market intelligence firm Information Services Group said earlier this week that the global outsourcing industry had experienced its highest ever second quarter.

The ISG Outsourcing Index, a measure of commercial outsourcing contracts with annual contract value of $5 million or higher, showed that a record 340 contracts were signed in the second quarter, with most growth coming from deals valued at under $40 million annually.

Competitor Infosys reported last week that its revenue for the quarter grew 7 percent year on year, to $2.13 billion, while net profit grew 15 percent to $482 million, on the back of some large deals.

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

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John Ribeiro

IDG News Service
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