India's largest outsourcer, Tata Consultancy Services (TCS) announced Monday strong growth in revenue and profits for the quarter that ended Sept. 30, despite earlier fears that the appreciation of the Indian rupee against the dollar would drive down profits of Indian outsourcers.
The company has absorbed the impact of the rupee appreciation, and improved its profitability, by a combination of currency hedging and cost management, TCS, of Mumbai, said Monday.
TCS reported revenue of $1.42 billion for the quarter, up 45.2 percent over revenue in the same quarter last year. Its profits for the quarter were $313 million, up 45 percent from the corresponding quarter last year. The company added 9,268 staff during the quarter, and currently employs over 100,000 employees. Foreign nationals made up 8.5 percent of total staff. TCS also added 49 new clients in the quarter.
India's rupee has appreciated by about 12 percent against the dollar from the beginning of this year. As a result of the weak dollar, Indian outsourcers earn less in rupees, even as their costs in India on staff are rising.
Infosys Technologies, India's second largest outsourcer, said last week that its margins had improved despite the weak dollar. Another outsourcer, iGate Global Solutions, said last week that the appreciating rupee had not affected its profitability, as the company had adopted cost-cutting measures, including moving more work offshore to India. Both iGate and Infosys reported better rates from clients in the U.S., the largest market for Indian outsourcers.
TCS, Infosys, and Wipro, India's third largest outsourcer compete for staff and business with multinational service companies like IBM, Accenture, and Capgemini, which have set up offshore delivery centers in India. Wipro is scheduled to reports its results for the quarter on Friday.