India's TCS lifts earnings 33 p.c. ReceivedSPF: None receiver=nym.alias.net clientip=70.89.231.62 Comments: This message

Wednesday, July 19, 2006 Posted: 0223 GMT (1023 HKT)

MUMBAI, India (AP) -- Indian information technology major Tata Consultancy Services Ltd has reported a 33 percent jump in its net income in the April-June quarter, during which the company won some big outsourcing contracts from North America and Europe.

Tata Consultancy Services, or TCS, said Tuesday its revenues in April-June totaled $900 million, up 42 percent from the period a year ago. Net income was estimated at $187 million, up 33 percent.

TCS was founded in 1968 and is part of the Tata Group, one of India's leading business conglomerates.

A large North American retail company chose TCS to partner in developing software applications in a deal worth over $50 million, while a leading European telecommunication company selected it to carry out tests on new networks, a company statement said.

The statement did not identify the companies.

"Our global network delivery model has been validated by customers," said TCS Chief Executive S. Ramadorai. "Q1 has been marked by strong growth in volumes coupled with increasing traction for our new growth engines like BPO (business process outsourcing) and consulting."

TCS, whose clients include AT&T Corp, American Express Co, Boeing Co, General Motors Corp, British Telecom PLC, Microsoft Corp and Dell Inc, pioneered the concept of outsourcing software development jobs to India.

Many Western companies routinely transfer their software development and back-office work to Indian firms in a bid to cut costs, because wages are low in the South Asian country and send workers are plentiful.

Tata Consultancy said it added 62 new clients and hired 7,095 employees during the April-June period, the first quarter of its current fiscal year.

The April-June earnings figures, which conform to U.S. accounting standards, beat analysts' expectation.

The company's operating margins were expected to shrink higher than it did during the quarter because of wage hikes in the industry.

"These are a positive set of numbers. Margin erosion of 140 basis points on quarter is lower than what we had expected," said Trideep Bhattacharya, head of technology research for Asia at UBS Securities.

The company also released another set of slightly different figures based on Indian accounting standards.

Tata Consultancy said its earnings per share rose to 17.63 rupees (US37c) in April-June from 16.26 rupees (US35c) in the previous quarter.

The announcement came after the Indian stock market had closed Tuesday.