TCS reports steady quarter as India business recovers

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India's largest software exporter Tata Consultancy Services reported nearly 17 percent revenue growth (AFP/PUNIT PARANJPE)

India's largest software exporter Tata Consultancy Services Friday reported nearly 17 percent revenue growth in the third quarter of the year, driven by steady demand and recovery of its India business.

The IT giant's net profit of 96.24 billion rupees ($1.28 billion) for the quarter was 28.75 percent more than same period last year.

Its revenues, driven by strong growth in all its business segments, grew 16.77 percent to 468.67 billion rupees ($6.24 billion) in the same period.

The firm's key banking and financial services segment grew 17 percent to cross $2 billion revenues in the quarter, contributing 39 percent of its total revenues.

Operating margins remained steady at 25.6 percent year-on-year, compared to 25.5 percent in the previous quarter, despite unfavourable currency conversion rates in the quarter.

"The strong and sustained demand environment is a once-in-a-decade opportunity to position ourselves as the preferred growth and transformation partner for our customers," TCS chief executive Rajesh Gopinathan said in a statement.

TCS's India business recovered after a weak June quarter, as its domestic revenues increased 20.1 percent compared to the last year.

Its overseas growth was led by North America, which contributes 50 percent of its business, and saw revenue growth of 17.4 percent year-on-year.

The revenues from the United Kingdom and Latin America also grew between 15 and 17 percent year-on-year.

TCS said it hired 43,000 fresh graduates in the first six months of the financial year, its highest number in the period so far, and it had plans to recruit at least 35,000 more this year.

Gopinathan was re-appointed by the company's board as chief executive until February 20, 2027.

The board also approved an interim dividend of 7 rupees ($.09) per share for shareholders.

TCS was at the forefront of an IT boom that saw India become a back office to the world as firms in North America and Europe subcontracted work, taking advantage of a skilled English-speaking workforce.

The company earns more than 80 percent of its revenues from its Western markets outside of India.

Shares of TCS closed 1.29 percent higher in Mumbai ahead of the results being released Friday.

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