India’s top IT services firm, TCS, kicked off the first quarter of its FY at a brisk pace, with headline revenue growth for the 3 months to 30th June at 16% yoy (to $3.16bn), its best performance for a year. Operating margins were a shade down yoy at 27.0% but 50bps better than the prior quarter, widening the gap to erstwhile ‘margin king’ Infosys (see The future starts again for Infosys). Volume growth (in effect, man-hours worked) grew by 6.1% qoq, fully two points greater than Infosys. If TCS can keep up this pace, it will have no trouble exceeding industry association Nasscom’s expectations of 12-14% growth in Indian offshore IT services this year.
As usual, we'll have much more to write about the India-centric IT services players – including their UK performance - in the next edition of OffshoreViews.