Indian outsourcers post big profits

Depreciating rupee helps results

Indian outsourcer Tata Consultancy Services has reported gains in both revenue and profit for the quarter ended June 30, reflecting a growing demand for offshore services and the depreciation of the Indian rupee against major currencies.

Tata is India’s largest software and services outsourcer.

Revenue for the period was US$900 million (NZ$1.46 billion), up 42% from the same quarter last year. Profit for the quarter increased by 33%.

About 53% of the company’s revenue in the quarter came from exports to North America, with another 27% from Europe. The company earned about 41% of its revenue from the banking and financial services industry. The company added 62 clients during the quarter, taking the total to 764.

The company hired 4,698 employees, increasing the headcount as of June 30 to 71,190. The company’s staff attrition rate was 10.6%.

Tata’s strong showing reflects an overall buoyancy in the Indian outsourcing industry. India’s exports of software and services are expected to grow by 27-30% in the year ending March 31, and to post revenue of between US$29 billion and US$31 billion, India’s National Association of Software and Service Companies said in June.

India’s second-largest outsourcer, Infosys, has announced that it expects revenue to grow by up to 36% in its fiscal year to March 31, 2007.

For the June 30 quarter, Infosys reported revenue of US$660 million, up 39% over the same quarter last year. Its profits were US$174 million, up by 43%.

The company added 38 new clients and 5,694 employees during the quarter, taking the total number of employees as of June 30 to 58,409.

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