The June quarter has kicked off the good times for the Indian IT sector, holding out the promise of higher perks for the millions of IT professionals.

HCL Technologies, among the top five Indian IT firms, which reported strong growth in its enterprise applications for the first time since the recession began two years ago, pointed to the $50 billion industry having turned the corner.

“During the last two years, most of our growth, as well as the big contracts, used to come from our ‘run the business’ services such as infrastructure and application development… However, the last quarter finally come back to ‘change the business’ solutions such as enterprise applications, research and development etc.,” said Vineet Nayar, CEO of the $2.7 billion enterprise.

“It’s hard not to be excited by a $ revenue growth at 7.7% quarter on quarter (9.1% quarter on quarter in constant currency) – which has beaten peers Infosys, TCS and WiproYet, the results raise fresh questions on the company’s strategy, which is paying off handsomely on revenues, but poorly on Ebitda. We expect no change in our earnings estimates despite the revenue beat,” said Bhavtosh Vajpayee & Nimish Joshi of CLSA Asia-Pacific Markets in a note after the results.

Ebitda margins were down 110 basis points sequentially to 18.6%, driven by continued losses in the BPO business. The company’s software services segment was also impacted by higher sub-contractor costs.

“We are placing our current Outperform rating on the stock under review pending clarity on the Ebitda trajectory for the company,” Vajpayee & Joshi said.

Indeed, HCL’s 7.7% growth in dollar revenues growth over the fourth quarter of last fiscal was spearheaded by enterprise applications, which gets most of its revenues from deploying huge, company-wide software suites such as SAP and Oracle.

The unit had underperformed others such as outsourced infrastructure management during the recession as companies froze their IT expansion plans and moved to conserve cash by outsourcing the management of their existing infrastructure.

During the last quarter, ‘expansionary’ services such as enterprise applications and R&D grew by 12% and 11% each. In comparison, bread and butter services such as infrastructure 9% and application development grew by 6.7% each while the company’s revenues grew by 7.7%.

“We are seeing the return of budgets to the sort of projects that haven’t been around for some time,” said Steve Cardell, head of HCL’s London-based enterprise applications subsidiary HCL Axon, acquired in late 2008.

The new contracts include both large SAP and Oracle roll-outs by global giants as well as numerous small projects such as business intelligence or data-mining, product design and R&D.

Encouraged, the firm will now expand its India development presence by hiring 1,000 experienced SAP and Oracle professionals in India over the next six months.

HCL’s rolls swelled by a record 6,500 people in the last quarter, its highest net addition in the last two years.

Out of the 11,000 people it hired during the quarter, around 70% were experienced workers, Nayar said.

With the clients going back to expansionary mode, Nayar saw a ‘war for talent’ as everyone tries to ‘stock up’ on employees for the anticipated growth.

“People did not invest in talent and training in the last 24 months.. Suddenly, in anticipation of growth, there is a scamble for talent even though there is no real immediate scarcity of talent..,” he said.

HCL has shot off increment letters to most of its employees which is likely to squeeze its profits in the current quarter, officials said. “Some increments due in October have been advanced to July,” Nayar said, refusing to reveal the extent of salary increments. He, however, saw industry-standard increments considerably north of the “8-10%” suggested by reporters.

HCL posted a 4% quarter on quarter decline in net profit, was hit hard by the steep fall in the value of euro.

The currency has lost around 15% of its value in the last six months due to worries over soveriegn debt levels in Europe. As a result, the contribution of Europe, including non-Euro Britain, shrunk from 28.5% a year ago to 24.6% of the total revenues during last quarter, despite stable volumes.

Volume growth for HCL, at more than 9%, was higher than the top three. Wipro had posted a volume growth of around 5% while TCS and Infosys, the leaders in the industry, had reported volume growth of 7-8%. HCL, which posted net profits of $73.6 million during last quarter, was dragged down by the performance of its shrinking BPO business, which still accounts for around 10% of the total revenues. Nayar said it will take another four to six months for the BPO business to stop making losses.

“We are investing $4-5 million every quarter to create a new platform [for the BPO business,]” and till then, it would continue to post losses,” he said. The BPO business posted a loss of $6.5 million before taxes and finance charges, eating into the $120 million profits created by the IT services business.

HCL is in the middle of a strategic shift from “non-core” BPO services such as outbound marketing calls to services that can be bundled with its IT services such as infrastructure management.

Source:http://www.dnaindia.com/money/report_hcl-bests-infy-tcs-wipro-says-it-growth-back_1416371

UK-based Business Process Outsourcing (BPO) service provider, Diligenta awarded a Cloud-based IT outsourcing contract to India’s Tata Consultancy Services (TCS).

Under the contract, TCS will deploy its BaNCS Insurance platform for the BPO player enabling it to consolidate its two million customer policies from multiple legacy systems onto a single integrated system.

The solution will allow Diligenta to adopt a utility model ensuring that whenever the firm writes a new contract, it can consolidate the policy portfolio of new customers onto the same TCS BaNCS Insurance platform. It will effectively result in the firm achieving better economies of scale. Customers can receive instant quotes for maturities, surrenders and transfers over the phone.

Phiroz Vandrevala, Chairman, Diligenta and Executive Director, TCS said, “The success of this transformation programme reinforces Diligenta’s strong position in the UK Life and Pensions outsourcing market and signifies a step change for the industry, in response to both regulatory reform and changing customer needs. We are well-placed to support customers’ needs in this rapidly-evolving environment, and this project once again demonstrates our ability to deliver real business benefits through our specialised industry expertise.”

Suresh Menon, Chief Executive Officer, Diligenta said, “Diligenta’s state of the art platform and extensive expertise in the UK Life & Pensions industry has ideally positioned us to partner with Phoenix Group to deliver this significant milestone. The transformation process has been successful and we look forward to future opportunities to deliver similar, state of the art projects within the insurance sector.”

Source:http://www.telecomtiger.com/fullstory.aspx?passfrom=enterprisestory&storyid=9693

Diligenta, a leading business process outsourcing provider in the UK and a subsidiary of Tata Consultancy Services announced today that it has completed the consolidation of 2 million customer policies in the US from multiple legacy systems onto a single integrated system, using a simplified and modern cloud infrastructure. These policies will now be based on TCS BaNCS Insurance platform, a proprietary solution developed by the company.

Diligenta embarked on this innovative transformation programme with its first client, the Phoenix Group. The objective of the programme was to improve operational efficiency with a view to enhancing the customer experience for the policy holders.

Source:http://www.indiainfoline.com/Markets/News/Tata-Consultancy-Services-subsidiary-completes-consolidation-of-2-two-million-customer-policies-in-UK/3197739083

Diligenta, a leading business process outsourcing (BPO) provider in the UK and a subsidiary of Tata Consultancy Services (TCS),the leading IT services, business solutions and outsourcing firm, announced today that it has completed the consolidation of two million customer policies in the UK from multiple legacy systems onto a single integrated system, using a simplified and modern cloud infrastructure. These policies will now be based on the TCS BaNCS Insurance platform, a proprietary solution developed by TCS.

Diligenta embarked on this innovative transformation program with its first client, The Phoenix Group. The objective of this program was to improve operational efficiency with a view to enhance the customer experience for the policyholders.

Tony Kassimiotis, Managing Director, Operations, Phoenix Life said, “This is great news for our customers and will mean a better overall experience for them. For instance, two million of our policyholders will have, in due course, full access to self service and on-line request services through the Internet. They will also see a reduction in turnaround times when asking questions about their policies. We are really pleased to be working with both TCS and Diligenta on this transformation program and are looking forward to realizing further benefits as we progress.”

This is also a significant capability achievement that will benefit Diligenta’s future clients. The utility model will ensure that when Diligenta writes new contracts, it can consolidate the policy portfolio of new customers onto the same TCS BaNCS Insurance platform. This will benefit both Diligenta and its clients through economies of scale with infrastructure and on-going operations and maintenance. A major benefit to clients will be Diligenta’s ability to react quickly and effectively to any major regulatory change. An additional service will allow customers to receive instant quotes for maturities, surrenders and transfers over the phone.

Phiroz Vandrevala,Chairman, Diligenta and Executive Director, TCS said,“The success of this transformation program reinforces Diligenta’s strong position in the UK life and pensions outsourcing market and signifies a step change for the industry, in response to both regulatory reform and changing customer needs. We are well-placed to support customers’ needs in this rapidly-evolving environment, and this project once again demonstrates our ability to deliver real business benefits through our specialized industry expertise.”

Suresh Menon, Chief Executive Officer, Diligenta said, “Diligenta’s state of the art platform and extensive expertise in the UK life and pensions industry has ideally positioned us to partner with the Phoenix Group to deliver this significant milestone. The transformation process has been successful and we look forward to future opportunities to deliver similar state of the art projects within the insurance sector.”

Charles Juniper, Insurance Sector Analyst at BPO specialists, NelsonHall said, “This is a significant achievement on the part of Diligenta. Migration to the BaNCS platform will allow Diligenta to accelerate the pace of cost savings through high levels of automation, reduced product templates, cleansed policyholder data and customer portals. The slowdown in sales of life insurance products in the mature UK and US markets is forcing the Boards of insurers to seriously assess the use of BPO models, particularly for closed blocks. Clients are looking for BPO providers with strong capabilities across a number of dimensions including operational improvement, direct control of platform development, first-rate migration and consolidation skills, a highly integrated multi-shore delivery model and a proven track record. With this milestone, Diligenta will be in a strong position to capture new life insurance BPO business going forward.”

Source:http://www.indiaprline.com/2010/07/28/tcs-helps-two-million-uk-insurance-policies-migrate-to-a-single-it-platform/

Tata Consultancy Services, India’s largest outsourcing company, plans to increase its workforce by a quarter to help drive expansion into fast-growing emerging markets.

India’s IT outsourcers, whose largest revenue stream comes from North America and Europe, have proved highly resilient in the economic downturn.

Now, as are many global businesses, they are looking for opportunities in high-growth regions, including Asia, the Middle East and Latin America. TCS is expanding its workforce by 40,000 to 200,000 people this year to service its fast-expanding global operations.

In the long term, emerging markets are expected to contribute “upwards of 20 per cent for TCS” in terms of overall revenues, compared with 7 per cent two years ago, said N. Chandrasekaran, the company’s chief executive.

The revenues TCS derives from emerging markets such as China, Latin America, Asia and eastern Europe have risen to about $1.2bn from $100m seven years ago.

However, Mr Chandrasekaran acknowledged that his group was struggling to crack opportunities in China, as it was in Japan, where it has been held back primarily by cultural barriers and high turnover of employees.

By contrast, the group has embarked on a more enthusiastic Latin American expansion in recent months.

He said: “We have close to 8,000 people in Latin America and our revenues are well over $300m. I think Latin America can easily be a $1bn market in the medium term.”

The company is expected to find it a big challenge to sustain its strong performance, where net profits rose 24 per cent in the latest quarter, analysts believe.

Rising pay is putting a strain on profit margins. TCS has said that it would spend $200m in the coming fiscal year on salary increases, and planned to give 10 per cent annual rises to Indian employees.

Infosys, TCS’s Bangalore-based rival, offered the highest salary increase of between 14 per cent and 16 per cent, in a bid to prevent its talent from moving to rival companies.

During the quarter to the end of June, TCS suffered an attrition rate of 13.1 per cent of its staff in spite of offering higher wages.

Seven thousand employees left the company during the period, out of a total workforce of about 160,000.

TCS is also concerned about the outlook for the poorly performing European market, as debt-laden governments seek to pare down fiscal deficits.

This week Mr Chandrasekaran is due to meet George Osborne, the UK’s finance minister, who arrived in India on Tuesday,to discuss the future of large contracts that TCS holds with the British government, including an $800m pensions contract that is under review

Source:http://www.ft.com/cms/s/2/2b7906da-999b-11df-a852-00144feab49a.html?ftcamp=rss

India’s top software service exporter, Tata Consultancy Services Ltd (TCS), sees Latin American sales more than doubling by 2015 as the company targets one of the world’s fastest growing regions.

TCS, which is owned by India’s biggest industrial conglomerate, provides IT, consultancy and outsourcing services in Mexico, Argentina, Chile, Uruguay, Brazil, Ecuador and Peru.

“We have a very aggressive growth project in Latin America for the next five years, we want to more than double our sales to over USD 1 billion,” Alejandro Valenzuela, manager for Peru, Chile and Ecuador, told Reuters in an interview.

“Latin America is really relevant to TCS because it has one of the fastest rates of economic growth,” Valenzuela said.

The region will grow up to 5% this year, according to the International Monetary Fund (IMF).

The economies of Brazil, the regional giant and member of the BRIC group of big emerging markets alongside Russia, India and China, and Peru will expand by about 7% this year, according to the IMF.

Valenzuela said the financial sector is central to the company’s Latin America operations.

Source:http://www.moneycontrol.com/news/business/tata-consultancy-to-double-latin-america-sales_472108.html

I was just looking through Ovum’s latest report about the IT outsourcing trends in central government.

The report lists the projects that have already been targeted for cancellation or face cancellation or renegotiation. It also outlines the projects that could go next in the government cull.

Already cancelled are Capita’s £430m twenty year Child Trust Fund programme, Capgemini’s £40m ContactPoint six year project and IBM’s National Identity Register deal worth £265m.

So here is what Ovum thinks could be next:

1 – Tata Consultancy Services faces the axe

TCS’s £600m Pensions Administrations and Delivery Agency could be the first to go. This was a big deal because it is the biggest government deal to be won by an Indian offshore service provider. There is a clause in the contract that states that when the first stage of the deal is complete in October 2010 there will be a decision on whether to continue or not.

TCS is responsible for IT services, system implementation and administration of the National Employment Savings Trust.

See earlier post about this.

2 – DWP deal with Fujitsu faces review

In March this year Fujitsu won a £330m contract to replace HP providing desktop services. The contract is over the new government’s £100m maximum cost ceiling and was only due to start at the end of 2010

3 – CSC National ID scheme deal could change

It also thinks CSC’s £385m ten-year National Identity Scheme deal will be reviewed.

The report warns suppliers to look for growth outside the public sector but there is some good news.

This is that IT service providers “hold a trump card” because IT can help government deliver more for less. It also says that the government has not “waged war” on IT suppliers but just on projects perceived to lack value.

Opportunities in government will, according to Ovum, be outsourcing, BPO, shared services and G-cloud.

Source:http://www.computerweekly.com/blogs/inside-outsourcing/2010/07/the-government-it-outsourcing-contracts-that-could-go-next.html

At least 35 big UK government IT outsourcing contracts are potentially at risk of renegotiation, including the Tata Constancy Services’ £600 million pension administration contract, as a result of the cuts in government’s IT budget, warns a report by technology research firm Ovum.

UK’s Conservative-Liberal Democrat coalition has imposed a £100-million cap on government IT contracts. The cuts are aimed at reducing spending and the budget deficit. According to Ovum, a total of 35 IT and business process outsourcing (BOP) contracts in UK central government are valued in excess of the limit of £100 million.

“TCS record £600-million contract with the Pensions Administration and Delivery Agency (PAD), signed with the previous Labour administration just weeks before the general election, will be one of the first facing renegotiation,” says John O’ Brian, senior analyst at Ovum. The research firm believes the David Cameron-led new government, will seek ‘quick wins’ wherever possible.

“While it will be highly unlikely that each of the 35 £100m-plus contracts will be changed, there is ample room for the new administration to make significant cost savings,” he adds. Cutting expenditure on these major deals by 10-15% over the next few years would amount to between £270 million and £408 million being removed from current central government IT spending annually.

TCS denied to comment on the report but responding to reporters queries a few days back, TCS CAE N Chandrasekaran had said that his company is in constant touch with its UK-based customer. “As far as we are concerned the project is on track. We have got a rate-contractual structure to protect us,” he had said.

UK-based BOP Serco, which has large operations in India may also take the impact. Serco’s over £100-million deal with HMRC for Business Link may come under scrutiny, observes Ovum. Companies like Noida based EXL Service and HCL also do large work for UK utilities like British Gas and British Telecom.

UK’s budget deficit has spiralled to over $235 billion, forcing it to have a relook at pricing of its contracts. As a result, its National Identity Register, project which aims to provide citizens with ID cards, is all set to be dropped. The government can be expected to begin targeting existing IT programs that are perceived to provide limited value, or return on investment, says Ovum.

Ovum adds that the new policies will not spell an end to the £8.5-billion a year public sector IT service market in UK. “For those prepared to stay the course, however, new opportunities will emerge. The government has not waged war with the IT industry. It’s just with programs that are perceived to be poor value for money, too risky, and which do not meet its political aims,” says O’Brien.

“This is going to make life far tougher for many suppliers over the next few years. Some will undoubtedly turn away from the market, and look to sources of opportunity in other verticals,” he adds. On a positive note, Ovum believes IT service suppliers can be optimistic if they are able to successfully navigate this difficult period, and look to prospects in the medium to long term.

Source:http://economictimes.indiatimes.com/infotech/ites/UK-budget-cuts-spell-trouble-for-600-million-pound-TCS-deal/articleshow/6207596.cms

Bharti Airtel has shortlisted three multinational firms and two home-grown IT majors for its billion dollar plus IT outsourcing contract in Africa, two people with direct knowledge of the matter told ET.

IBM, which currently handles Bharti’s IT for India and Sri Lanka along with Hewlett Packard and Accenture are among the multinational vendors that have made it to the shortlist. Also, Wipro and Tech Mahindra are the Indian vendors in the running for what could be one of the largest IT deals spread across 15 geographies in Africa.

“Both Infosys and Tata Consultancy Services are no longer in the race,” said the person quoted earlier . Another executive with direct knowledge of the development said that IBM, which was considered as the front-runner for the deal, was now facing stiff competition from the attractive terms and conditions offered by other IT firms in the fray. This executive also added that business sense mandated that Bharti diversify its IT options as against putting all its ‘eggs in one basket’ .Bharti executives did not comment.

In April-end Bharti Airtel had invited Request for Information or RFI to outsource operations worth over a billion dollars for African assets it acquired from Kuwait’s Zain Telecom, suggesting it is looking for better deals than those being offered by its existing partners. It is learnt that a number of IT firms had made presentations to Bharti Airtel’s management in response to its RFI. Executives with leading IT firms who did not want to be named said that Bharti had issued a revised tender for its IT contract earlier this month because of reservations expressed by some vendors regarding a few terms and conditions, which they felt favoured the incumbent, IBM. But, ET could not independently verify this.

While IBM already has IT deals with three large Indian telcos (Bharti Airtel, Idea Cellular and Vodafone), Wipro has the deal for Aircel and Telenor, and Tech Mahindra has been roped in by Etisalat DB (Swan) to manage its IT requirements. HP and Accenture are yet to win any large deals from Indian telecom players.

All the vendors are stepping up efforts to woo Bharti . Tech Mahindra, which already does some work for Zain, is learnt to have invited Sunil Mittal for a gala dinner it hosted for select customers before the FIFA finals, where Mahindra Satyam was one of the sponsors. HP is also learnt to have committed a lot of pre-sales expenditure .
“Though Bharti may want to de-risk its IT by giving it to a vendor other than IBM, it may find it hard to refuse IBM if it makes a compelling proposition. Bharti is highly leveraged and if IBM makes a good offer, it may go with it,” said an executive from the IT industry, requesting anonymity.

Bharti Airtel’s 10-year deal with IBM was originally estimated to be worth $750 million but it has already crossed $3 billion, an industry executive with knowledge of the contract said. Bharti had also outsourced the IT needs for its Sri Lankan operations to the USheadquartered company. Riding on the success of its deal with Bharti, IBM signed similar outsourcing agreements with Vodafone and Idea Cellular worth $1.2 billion and $900 million, respectively, in 2008. Last year, IBM signed a similar deal with Malaysia’s Maxis to manage its IT operations.

Another executive said that Bharti may explore the option of having different IT vendors for its divisions in Africa. These divisions include Bharti Anglophone (comprising of the English speaking nations), Bharti Francophone (comprising of the French speaking nations) and Nigeria.

Outsourcing all key operational functions is the key to its low-costhigh-usage business model that has enabled the telco to emerge as the country’s largest operator. Replicating this outsourced model of operations in Africa will be the key to returning Zain to profitability.

Source:http://indolinkenglish.wordpress.com/2010/07/23/bharti-shortlists-five-cos-for-1-bn-africa-it-outsourcing-deal/

Wipro (WIPR.BO) posted a higher-than-expected 31 percent rise in quarterly profit as global demand for outsourcing improved and the No. 3 Indian software firm said it was seeing strong business environment.

Bangalore-based Wipro expects revenue from its IT services business in July-September to rise 4.1-6.1 percent from the June quarter to $1.25 billion-$1.28 billion, the company said.

“We are seeing strong demand environment across our industry verticals despite macro challenges,” billionaire Chairman Azim Premji said in a statement.

Last week, sector leader Tata Consultancy Services (TCS.BO) beat market estimates and said it was seeing strong demand for outsourcing. [ID:nSGE66D0ID].

No. 2 Infosys (INFY.BO), however, posted a surprise fall in quarterly profit and said a weak European economy could curb new orders and dampen a recovery for India’s outsourcing sector.

Wipro, majority-owned by billionaire Azim Premji who mostly travels economy class, added net 4,854 employees in the June quarter.

Rising outsourcing demand has seen Indian IT firms boosting hiring and raising salaries as they battle intensifying competition from global rivals such as IBM (IBM.N) and Accenture (ACN.N).

However, a debt crisis in Europe, the second-biggest market for Indian software firms, as well as currency fluctuations are key worries for the country’s $60 billion outsourcing sector.

Research firm Forrester said in a report this month that Europe’s volatile economic situation and uncertainty about corporate IT budgets would result in possible delays or cancellations of some outsourcing projects.

Wipro, which develops software applications, integrates IT systems and manages call centres, said net profit for the June quarter rose to 13.19 billion rupees ($280 million) under international accounting standards from 10.10 billion.

A Reuters poll of brokerages had forecast a net profit of 12 billion rupees for Wipro, which counts Citigroup (C.N), Cisco (CSCO.O) and Credit Suisse (CSGN.VX) among its leading clients.

Source:http://www.reuters.com/article/idUSSGE66K09K20100723

Let me take you back by 6 years, when I took a plunge into stock markets – Infosys was a marquee name for me then and, may be, even now. And, at that time I was not even aware that TCS was a bigger company than Infosys (Oops! my ignorance). In fact, TCS was not even listed on the stock exchanges then, if I am not wrong.

Yes, TCS always lacked that extra-edge and aura that revolved around the Infosys, ever since its inception. Though, the success story of TCS cannot be undermined by any bit and its business remains as robust as ever.

Some IT analysts are of the opinion that this extra zing is due to the sheer professionalism that the Infosys management has exhibited under the leadership of Narayan Murthy followed by Nandan Nilekani. While other wise people say that Infosys has always indulged and stuck with the high margin game.

The fact of the matter is that the bellwether IT major Infosys Technologies still continues to remain the torchbearer of the Indian outsourcing industry – this, even as its business size is trifle smaller than that of TCS. But, it’s high time that TCS regain its reputation as the most illuminative Indian IT company.

In fact, the Tata group company has outperformed Infosys in terms of various parameters including strong demand momentum. For the Q1 results, Infosys reported a negative surprise with 2.6% drop in its profits, but it was an up-tick in its full-year revenue guidance on hopes of strong outsourcing demand which proved as a face-saver to some extent.

On the other hand, TCS came up with a stellar performance of 24% jump in the June quarter profit of Rs.1906 crore as against Rs.1534 crore for the same quarter last year. On the back of stable pricing environment, the company continues to log geographically and industry-wise spread broad-based growth. Two contrasting results performances, indeed!

Interestingly, led by robust revival of the global economy from the worst recession ever, both Infosys and TCS battles with the problem of rising employee churn and high attrition levels on the back of higher demand for IT professionals during the April to June quarter. However, TCS stands out in the way that it has managed its staff constructively over the last few quarters.

TCS logged a strong 8% volume growth as against 6% growth reported by Infosys. In fact, the Ebitda margin at 29.3% for TCS has almost closed down the gap with that of Infosys which stood at 31.6%. The revenues for TCS grew by 62% while that of Infosys surged by a lower 4.8%.

On Friday, TCS rallied 6% to notch the market capitalization of Rs.1.63 lakh crore as against that of Rs.1.59 lakh crore of Infosys. The real catch is the margin game over where the erosion was much higher in case of Infosys at 180 bps vis-à-vis 36 bps for TCS. Thus, TCS is gradually improving on the margin front relative to Infosys.

Better than expected bottom-line led by cost-efficiencies and improving deal pipeline has placed TCS on a forward curve as against Infosys. Further, below-expectation results by Infosys and upward revision of earnings from TCS will provide an added edge to the Tata group company in narrowing down the valuation gap between both the Indian IT giants.

Source:http://trak.in/tags/business/2010/07/18/tcs-infosys-top-most-valued-it-company-india/

Tata Consultancy Services (TCS), the country’s largest software company, posted a 24% increase in net profit to Rs 1,906 crore in the April-June quarter, compared to Rs 1,533 crore in the corresponding quarter last year, boosted by increased outsourcing from overseas clients, which pleasantly surprised analysts.

Similarly, its revenue rose 14% to Rs 8,217 crore, from Rs 7,206 crore. India’s software services giant announced its first quarter financial results after the close of market hours.

On Thursday, the TCS scrip closed at Rs 784, up 1.22% on the BSE. Though the company has seen demand across markets and industry sectors during the first quarter of FY 2011, it remains alert about the changing macro dynamics in many markets including the fragile European economy, which could curb new orders. Europe is the second largest contributor to TCS’ revenues.

Revenue from Continental Europe such as France, Germany and Italy stood at 11% as against 9% during the period under review. And UK, which contributed around 17% of TCS’ revenue in the June quarter of FY10, accounted for 15% this quarter.

However, there is a cloud looming around its pounds 600 million, 10 year, Personal Accounts Delivery Authority deal to administer the National Employee Savings scheme with the UK government reviewing all the large outsourcing deals.

However, TCS CEO & MD N Chandrasekaran putting a brave face told reporters, “The most significant deal in UK is the PADA deal. We are in constant touch with the customer. As far as we are concerned the project is on track. We have got a rate-contractual structure to protect us.”

Interestingly, North America accounted for 55% of its revenues during the June quarter as against 52% in the June quarter of FY 10 underscoring optimism about a recovery after a severe meltdown crimped margins.

Source:http://timesofindia.indiatimes.com/tech/news/software-services/TCS-Q1-rises-24-on-offshoring/articleshow/6175148.cms

Tata Consultancy Services Ltd is seeing strong demand for outsourcing services and India’s top software services exporter is chasing 15 large deals, its chief executive said on Thursday.
The company, part of the Tata Group that spans commodities, autos and services businesses, earlier posted a 21 percent rise in quarterly profit, beating street estimates.

Source:http://www.reuters.com/article/idUSBMA00800720100715

Tata Consultancy Services Ltd, India’s top software services exporter, posted a 21 percent rise in quarterly profit, beating estimates, helped by a surge in outsourcing demand from overseas clients.

The firm, part of the Tata Group that spans commodities, autos and services businesses, said on Thursday net profit in the June quarter rose to 18.4 billion rupees ($395 million) under U.S. accounting standards.

A Reuters poll had forecast a net profit of 17.6 billion rupees for the firm which counts Citigroup, General Electric General Motors, Lloyds TSB, Ferrari and American International Group among its clients.

Infosys Technologies, the No. 2 software exporter, on Tuesday posted an unexpected decline in quarterly net profit, saying a weak European economy could curb new orders and dampen a recovery for India’s outsourcing sector.

Source:http://www.reuters.com/article/idUSBMA00800520100715

Tata Consultancy Services (TCS), the country’s largest software company, on Thursday, posted a 24% increase in net profit to Rs 1,906 crore in the April-June quarter, compared to Rs 1,533 crore in the corresponding quarter last year, boosted by increased outsourcing from overseas clients, which pleasently surprised analysts. Similarly, its revenue rose 14% to Rs 8,217 crore, from Rs 7,206 crore.

India’s software services giant announced its first quarter financial results after the close of market hours. On Thursday, the TCS scrip closed at Rs 784, up 1.22% on the BSE. Though the company has seen demand across markets and industry sectors during the first quarter of FY 2011, it remains alert about the changing macro dynamics in many markets including the fragile European economy, which could curb new orders. Europe is the second largest contributor to TCS’ revenues.

Revenue from Continental Europe such as France, Germany and Italy stood at 11% as against 9% during the period under review. And UK, which contributed around 17% of TCS’ revenue in the June quarter of FY10, accounted for 15% this quarter.

However, there is a cloud looming around its pounds 600 million, 10 year, Personal Accounts Delivery Authority deal to administer the National Employee Savings scheme with the UK government reviewing all the large outsourcing deals.
However, TCS CEO & MD N Chandrasekaran putting a brave face told reporters, here on Thursday; “The most significant deal in UK is the PADA deal. We are in constant touch with the customer. As far as we are concerned the project is on track. We have got a rate-contractual structure to protect us.”

Interestingly, North America accounted for 55% of its revenues during the June quarter as against 52% in the June quarter of FY 10 underscoring optimism about a recovery after a severe meltdown crimped margins.

Source:http://timesofindia.indiatimes.com/biz/india-business/TCS-profit-rises-24-in-Q1-on-offshoring/articleshow/6174075.cms