Tata blames rising dollar for falling profit and revenue

Profit and revenues for Tata Consultancy Services' most recent quarter are down from the...

Profit and revenues for Tata Consultancy Services' most recent quarter are down from the same period last year.

The IT services company blamed the fall in the value of currencies in the UK, Europe, Australia and Brazil against the dollar for the fall.

Profit fell by 18% to $276m and revenue fell slightly from $1.5bn to $1.48bn in the third quarter of this year which ended December 31, compared to the same period in 2007.

However, the figures amount to an increase in revenue and profit when taken in Rupees.

The figures contrast to the company's announcement at the same time last year when it reported 37% increase in revenue and a 35% increase in profit for the third quarter ended 31 December 2007 compared to the year before.

S Mahalingam, CFO at TCS, said, "TCS has significant exposure in non-dollar denominated revenues and the depreciation in GBP, Euro, Australian Dollar and Brazilian Real has meant that the revenues earned in those currencies translated into a lower amount of dollars. This has impacted the revenue and profit growth in dollar terms, though in constant currency and absolute terms, the company's business continues to grow."

He said the company would have to cut costs in the current economic climate.

During the quarter, TCS won 41 new customers compared to 54 in the same period the year before.

But there was an increase in the number of people the firm recruited, with 11,773 people joining compared to 7,522 in the same quarter a year earlier. The total workforce is 130,343, 52% of which have more than three years' experience.

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