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India’s biggest IT services exporter Tata Consultancy Services on Thursday reported record quarterly earnings, buoyed by growth in its banking and financial services division and increased demand in Western markets, reports BSS/AFP.
Mumbai-based TCS posted a 24.1 percent rise in net profit to 81.04 billion rupees ($1.15 billion) for the quarter ended December 31, up from 65.31 billion a year earlier, the company said in a statement. The conglomerate, which has faced lawsuits in the US over its hiring practices, said profits were boosted by client additions and “stellar growth” in Britain and Europe, which climbed 25.1 percent and 17.6 percent, respectively.
“We are wrapping up 2018 with a strong revenue growth of 12.1 percent in the December quarter, which is the highest in 14 quarters, with continued growth acceleration in key verticals and across all geographies,” TCS chief executive Rajesh Gopinathan said in a statement. The weakness of India’s rupee, Asia’s worst-performing currency in 2018 falling 14 percent against the dollar, is helping outsourcing giants such as TCS book profits. A falling rupee helps the services exporter as it bills clients in dollars thereby boosting its profits. “Despite headwinds from the rupee volatility against various currencies, and the higher cost of doing business in some major markets, our operating margins have been resilient,” TCS financial officer V. Ramakrishnan said. TCS gets more than 80 percent of its revenues from Western markets including the United States and Europe.
India’s $150 billion IT sector has long been one of its flagship industries but is facing upheaval in the face of automation, a failure to keep up with new technologies and visa restrictions.
In November 2018, TCS was cleared of anti-American bias by a Californian court after former staffers, mostly Americans, had accused the IT giant of hiring predominantly Indians and firing locals. TCS’ rival Infosys is due to release its quarterly results on Friday.