UK growth boosts Tata's stellar third quarter

Financial services drives outsourcing firm's high growth

The UK is the second-highest growth market for Tata Consultancy Services (TCS), the IT services arm of India’s engineering giant, the company’s third-quarter results have revealed.

TCS’s business in the UK is growing at 16 per cent per annum, according to a presentation given to financial analysts as part of the company’s third-quarter results.

But UK growth was easily outstripped by TCS’s North American operation, which is growing at over 53 per cent per annum.

TCS posted a profit of $517m (£322m) in the quarter ended 31 December 2010, up over nine per cent compared with the previous quarter – faster than the booming Indian economy – and a massive year-on-year leap of 30 per cent.

Revenue from international business grew at 25 per cent year on year, or just under five per cent over last quarter.

Revenue from TCS's domestic business grew 37 per cent on last year, but dipped three per cent on the second quarter.

Financial serices contributed nearly half of TCS’s growth – over 44 per cent by sector – with telecoms and retail contributing 12 and 11 per cent respectively.

Application development and maintenance is the company’s fastest-growing service offering, contributing 45 per cent of growth by service type.

TCS’s revenue is also growing impressively: some four per cent higher than the second quarter at $2.14bn, and up 26 per cent on the same period last year.

The company has 959 customers of which the top 10 account for some 30 per cent of its revenue.

TCS employs 164,000 people of which 93 per cent are of Indian origin. Its operating margins are running at 28 per cent, just shy of the company’s all-time high.