India’s largest outsourcer, Tata Consultancy Services (TCS), reported today strong growth in revenue and profit, despite the appreciation of the Indian rupee against the US dollar, and higher staff costs in India.
The company reported for the quarter ended 30 June revenue of 52bn rupees (£628m), up 25.6% from the same quarter a year ago. The company’s profit for the quarter was 11.8bn rupees £143m), up 37.4% from the same quarter in the previous year.
TCS' revenue and profit were however flat in rupee terms in the quarter to 30 June in comparison to the previous quarter ended 31 March, reflecting the appreciation of the rupee against the dollar. Revenue and profit however grew 8% quarter-on-quarter in dollar terms.
The company added 54 clients and 5,512 employees during the quarter, taking the number of employees to 94,902. Staff attrition rate in the quarter was 11% in its IT services business, with the attrition rate higher at 16.7% in its business process outsourcing (BPO) business.
TCS, of Mumbai, said its net margins were not affected despite the rupee appreciation and a planned wage increase during the quarter, because of better cost management, currency hedging and productivity increases.
A strong rupee affects margins of Indian companies as it brings down the value of foreign revenue in terms of rupees, even as costs incurred in India, such as staff costs, are going up.
India's second largest outsourcer, Infosys Technologies, reported last week a 40.6 per cent growth in revenue and 51% growth in profits in the quarter.
India’s software and services exports are projected to grow by 26% to 29% to about £19.64bn in the fiscal year to next 31 March, India's National Association of Software and Service Companies said this month.