Indian outsourcer Tata posted strong revenue and profit growth, as India continues to be a favourite for offshore contracts.
Tata Consultancy Services (TCS), India's largest outsourcer, Monday reported strong revenue and profit growth for the quarter that ended 31 December, driven by new client wins and a growth in business from existing customers.
Revenue for the quarter was Indian Rupees 48.6 billion (£560m) up 40.8% over revenue in the same quarter in the previous year. The company's profits grew in the quarter by 47.25%.
Despite the appreciation of the Rupee over major currencies, TCS was able to increase its revenue because of larger volumes of business, new services, and higher prices, S. Mahalingam, the company's chief financial officer told analysts. The company’s margins have also improved because of higher pricing, cost cutting and improved productivity, and a shift of more work offshore to India, he added.
TCS has set up operations in China, Eastern Europe and Latin America both for proximity to customers and to take advantage of talent pools outside India. But more than 90% of its staff was still from India at the end of the quarter. The company added 55 new clients during the quarter, including five new deals of more than $50 million each.
Indian outsourcing companies continue to ride a boom in outsourcing. India's second largest outsourcer, Infosys Technologies reported last week that revenue for the quarter that ended 31 December was $821m (£417.4m), up 46.9% from the same quarter of the previous year. The company's profits also grew by 52% to $218 million.