TCS wins $847 mn outsourcing deal in UK

TCS wins $847 mn outsourcing deal in UK

Tata Consultancy, India's leading software exporter, on Tuesday said it had won a £480 million ($847 million) outsourcing contract from Britain's Pearl Group insurers for a 12-year-period.

Tata Consultancy (TCS) said the British group would transfer its entire existing business processes to a new TCS subsidiary proposed to be set up in Britain to manage the new acquisition.

"The agreement will mean that a new company, a subsidiary of TCS, will be set up and employ about 950 of Pearl group's current 1,100 staff," TCS said in a statement to the Mumbai stock exchange.

The new subsidiary will specialise in business process outsourcing for life and pension businesses starting with Pearl Group. It will also manage businesses of other insurance companies.

"The deal will generate revenues of over £480 million ($847 million) over the next 12 years," TCS said.

"This deal validates our strategy of pioneering the next generation of Business Process Outsourcing opportunities," S Ramadorai, chief executive officer of TCS, said in the statement.

"Our extensive experience working in the insurance industry together with our excellence in technology will help us emerge as a significant player in life assurance and pensions administration services and help us continue our strong growth momentum."

On the Mumbai stock exchange, shares of TCS rose 1.26 per cent or Rs 18.10 to 1,451.95 after the company issued the statement.

Last week TCS announced a second quarter net profit rise of 21 per cent from a year ago driven by new businesses from existing clients.

Tata Consultancy net profit rose to Rs 6.93 billion ($157 million) in the quarter ending September 30, 2005 from Rs 5.74 billion ($131 million) a year ago.

Total second quarter revenue rose 21.8 per cent to Rs 29.82 billion ($677 million) compared to Rs 24.48 billion a year ago.