Indian outsourcer Tata posts 27 percent revenue growth

BANGALORE, INDIA - Tata Consultancy Services (TCS), India's largest software and services outsourcer, reported gains in both revenue and profit for the quarter ended June 30, reflecting strong international demand for its IT and consultancy services business, the company announced Friday.

Revenue for the period was $622.71 million, up by 27 percent from the same quarter last year. Net income for the quarter increased by 22.6 percent from a year earlier to $142.19 million. The results are based on U.S. generally accepted accounting principles (GAAP). About 59 percent of the company's revenue came from exports to the U.S., with another 23 percent from Europe.

The results announced by TCS in Mumbai refer to the first quarter of its fiscal year, which runs from April 1 this year to March 31 next year.

The company added 68 new clients during the quarter, taking the total to 553 clients, including a $100 million order from an undisclosed U.S. financial firm. It added 2,690 new staff during the quarter, taking the total number of staff to 48,711. During the current fiscal year, the company plans to add 13,500 staff in India and 2,000 staff abroad, according to a statement Friday from the company.

TCS' strategy to set up Global Development Centers (GDCs) in other countries is paying off as some of the new business was bagged by these centers, according to the company. The company's GDCs in Uruguay, Brazil, China and Hungary attracted 12 new customers in the quarter to June 30 this year.

As part of its expansion in newer markets, TCS also announced Friday that Tata Infotech, another IT services company of the Tata Group, would be merged with TCS. Tata Infotech in Mumbai employs 3,600 consulting professionals, and has operations in the U.S., U.K. and Australia. The company also provides hardware design and contract manufacturing services.

TCS' strong showing reflects an overall buoyancy in the Indian outsourcing industry. India's software and services exports were $17.2 billion in the fiscal year to March 31, up 35 percent from the previous year, according to the National Association of Software Companies (NASSCOM), in Delhi. Exports of software and services are expected to grow by between 30 percent and 32 percent in the current fiscal year, according to NASSCOM.

Infosys Technologies, India's second largest software and services outsourcer, reported gains in both revenue and profit for the quarter ended June 30, the company announced Tuesday.

Revenue for the period was $476 million, up 42 percent from $335 million in the same quarter last year. Net income increased by 47 percent to $122 million, from $83 million a year earlier, Infosys said. The results are based on U.S. GAAP.

Wipro Ltd, India's third largest outsourcer in Bangalore, is scheduled to announce next week its results for the quarter.