labels: tata consultancy services, it news
TCS placed among world''s top 10 profitable IT companies news
25 June 2007

Mumbai: Tata Consultancy Services (TCS), India''s largest software services company, has been ranked among the world''s top 10 profitable firms by BusinessWeek magazine. TCS also ranks 23rd among world''s 100 leading IT companies.

TCS was the only Indian company ranked among the top 10 most profitable companies with a return on equity of 46 per cent, a TCS release said.

Mumbai-based TCS, which went public in 2004, has been growing rapidly with 41 per cent rise in revenues at $4.3 billion for the fiscal year ended March 31, 2007.

TCS has the largest network of delivery centres outside of India among all Indian firms. In Latin America alone it employs more than 5,000 people, most of them locals, and it just announced a new service delivery centre in Mexico.

"TCS is focused on delivering the best results for our global customers. This recognition from BusinessWeek is testament that our dedication to customers is helping to fuel our global growth and success, TCS CEO and MD S Ramadorai said.

The results are to be seen against a strong rupee that has helped curb profitability of IT firms in the country.TCS said the rupee''s appreciation against the dollar will erode earnings as almost all of the company''s sales are generated overseas.

`We''re very concerned,'''' Ramadorai said in an interview in Mumbai. "The way the rupee drastically appreciated in the last couple of days is definitely of concern."

TCS and local rivals, including Infosys Technologies Ltd., may post slower growth in profit and sales this year as an appreciating rupee reduces the value of earnings from the US, their biggest market.

TCS hopes to offset the fall in profitability by raising rates charged to clients for managing computer networks, Ramadorai said.

TCS, which gets almost 91 per cent of its sales from overseas, has a pipeline of orders that''s `fairly strong'', Ramadorai said. The company is in talks for 10 new orders, and three to four contracts will be renewed soon.

Ramadorai expects the central bank to curb gains and weaken the currency to Rs43 to Rs43.50 to a dollar in six months from 41.74.

The company reported fourth-quarter profit rose 47 per cent, less than analysts expected, as an appreciation in the rupee eroded the value of overseas sales.

Net income climbed to Rs1170 crore ($280 million) for the three months ended 31 March from Rs796 crore a year earlier, the company said in a statement on its web site.

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TCS placed among world''s top 10 profitable IT companies