Tata Consultancy Services [TCS] reported record sales for its third quarter, with revenue for coming in at $2.59 billion, up 20.6 percent year-over-year.
TCS also reported that operating profits for the third quarter ended Dec. 31 were up 24.7 percent year-over-year, helped by growth across markets, including Europe, growth across industries and service lines, and the weak rupee.
Growth in the third quarter came across markets. Among mature markets, Europe, which comprises 10 percent of TCS' revenue, led the growth story. Sales from Europe increased 54 percent year over year, and were up 18 percent from last quarter. The increase in business comes as European companies increase outsourcing IT services to companies such as TCS.
North American business, which makes up half of the company's revenue, grew 36 percent from a year ago and 13 percent from the prior quarter.
“We continue to focus on managing our operations optimally in the face of increased external volatility. We have increased our operating margins significantly by taking the benefits of growth, exchange movements and by keeping a strong focus on cost management," S. Mahalingam, Chief Financial Officer, said in a statement. “The level of currency and market volatility has only risen in the past three months and we are adapting our strategies accordingly.”
In the growth markets, Latin America showed significant momentum followed by India and Asia-Pacific. In terms of services, TCS’ full services capabilities continue to be leveraged by customers with new service lines like Enterprise Solutions, Assurance and Infrastructure Services, Global Consulting growing at a significant rate.
The company also added 12,000 companies during the third quarter. TCS's results are dramatically different from rival Infosys, which cut earnings guidance for the fiscal year ending in March, noting global uncertainty and the financial crisis in Europe.
