TCS net profit rises 7 percent in FY09 Q1, warns of "difficult" times ahead

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Tata Consultancy Services or TCS is an IT services, business solutions and outsourcing organization that delivers real results to global businesses, ensuring a level of certainty no other firm can match. TCS offers a consulting-led, integrated portfolio of IT and IT-enabled services delivered through its unique Global Network Delivery Model, recognized as the benchmark of excellence in software development. A part of the Tata Group, India's largest industrial conglomerate, TCS has over 116,000 of the world's best trained IT consultants in 50 countries. The company generated consolidated revenues of $5.7 billion for fiscal year ended 31 March 2008 and is listed on the National Stock Exchange (NSE) and Bombay Stock Exchange (BSE) in India.

ABOUT INDIA'S IT-BPO INDUSTRY

India's $64 billion IT-BPO industry employing 2 million people and dominated by firms like TCS, Infosys Technologies, Wipro, Satyam Computer Services and HCL Technologies that offer solutions like system integration, application development, and supply chain designing and back-office services, accounts for 5.4 percent of the country's gross domestic product (GDP). The industry, which grew in the mid-1990s and helped the nation's economy surge to an annual growth rate of nine percent, is expected to increase its workforce to 8 million by 2018.

NASSCOM or National Association of Software and Services Companies, the consortium that serves as the apex body of the Indian IT software and BPO industry, has estimated that the Indian business process outsourcing, or BPO, industry provided direct employment to 704,000 professionals in FY 2007-08, and has projected that it will generate an additional 1.4 million jobs by 2010.

The lobby group projected earlier this month that India's software and services exports would witness a slowdown in growth and rise between 21-24 percent to around $50 billion in the current fiscal year (FY09).

According to NASSCOM's report titled, "FY08 Revenue Performance and FY09 Forecast for the Indian IT Software and Services Sectors," the IT-BPO sector grew by 29 percent during the fiscal year ended March 31, 2008 (FY08) to $40.4 billion but would moderate during the current fiscal year due to the downturn of the US economy, global food and oil crisis and currency fluctuations.

Meanwhile, total revenues from the IT-BPO sector, including from domestic business, would rise between $62-64 billion in FY09, up from $52 billion in FY08, NASSCOM said.

Though India's large pool of English-speaking IT workforce and cheaper wages have kept it ahead of its rivals like China, Philippines and Vietnam, and helped attract business from western firms such as ABN AMRO AAH.AS, Nortel and Airbus, yet, global financial turmoil and economic slowdown in the US have taken their toll on India's IT-BPO sector.

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