Indian outsourcing firm rakes in $2 billion
Yearly figures top $2 billion, but fourth-quarter growth at TCS, India's largest software company, is flat.
Net profit for Tata's fiscal year, which ended March 31, was $510 million, up 38 percent from the previous year, the company said. However, revenue growth was flat compared with the third quarter, TCS officials said. The company employs about 45,000 workers in India and at its offshore operations.
The lower-than-expected last-quarter results of the Mumbai-based outsourcing company follow the first-quarter guidance issued by another leading software company, Infosys, last week.
The lower earnings of Indian software companies are being linked to a slowdown in business due to compliance issues in the U.S. TCS earned almost 60 percent of its revenue from North and South America in the year ended March 31, compared with 62 percent in the previous year. About 14 percent of its international revenue came from one American client, General Electric, alone. This is down from the 14.8 percent revenue it earned from GE last year.
TCS attributed the shrinking revenue from the American market to its strategy to focus more on European markets. The company, which faced opposition in the U.S. in the past, has diversified into new markets, including China. Last week, Chinese Prime Minister Wen Jiabao visited the company's software factory at Bangalore.
"The challenges we face are to address effectively concerns relating to security and protection of clients data and intellectual-property rights, ensure a smooth transition of work from offshore to onshore, and manage our attrition rates carefully so that work flow is not affected," CEO S. Ramadorai said at a press conference.