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Tata Consultancy Services becomes the latest Indian IT outsourcer to report more mundane rate of revenue growth

Not so long ago, the Indian IT outsourcing provider would routinely report quarterly revenue growth rates knocking 50%. Recently, however, they have been reporting far more humble numbers as the credit crunch begins to take its toll on India’s highly globalised high-tech economy.

Tata Consultancy Services (TCS), the country’s largest IT provider, is the latest to continue this trend. This week it published results for its second quarter of the financial year.

Revenue grew by a sober 15% year on year to reach $1.57 billion, compared to 45% in the same quarter of the previous year. Profit, meanwhile, was up a mere 3%, year on year, to $287 million.

Tata did manage to grow revenues in its financial services division, which contributes 41% of its revenues, despite extremely troubled timed in the sector. However, that department’s growth was considerably slower than the company as a whole.

The banking crisis has not been all bad for TCS, however. The company recently announced its intention to buy banking giant Citigroup’s business processing division.

Earlier this month, fellow IT outsourcing giant Infosys reported 19% growth on revenues of £715 million for its second financial quarter; that compares to 37% in the same quarter of last year.

Wipro managed better in its second quarter, with revenue growth of 36% – up to $1.36 billion – down only slightly from 41% last year. However, profit grew by just 1.3% and the company issued a cautious outlook for the coming quarter.

Further reading

Citigroup to sell its Indian back office to TCS
Indian IT services buying spree continues with banking giant’s captive sale

Offshore 2.0
Organisations are now looking to their sourcing partners for technology and business process innovation

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