Tata Consultancy Services (TCS) has reported a massive drop in net income growth in the first quarter of its financial year: Q1 2008 net income was up just two percent, at $296 million, against Q1 2007's figure of 55 percent growth. However, revenues were up 21 percent year on year at $1.5 billion, and margins remained steady.

The reason for the collapse in income growth was a sudden fall of the value of the rupee: the company had hedged that the currency's value would continue to rise against the dollar as the downturn hit. Instead, the value of the rupee has fallen sharply in recent weeks, leading to related losses of some $18 million.

"We have been able to respond to the challenging macro environment and drive growth in the business under tough operating conditions and manage costs," said S Ramadorai, TCS chief executive and managing director of TCS.