In the three months ending June 30, 2007, TCS reported sales of $1.3bn, up 25.6% on a US GAAP basis and by 36.3% on an Indian GAAP basis. Net profit of $291m was up 37.4% on the former basis and 36.3% on the latter.

The biggest talking point of the current earnings season in the Indian IT services sector is the impact that the appreciation of the rupee against the dollar – it us up almost 9% since the start of the year.

TCS said its use of a hedging policy to mitigate the fluctuations in the various currencies in which it bills is paying off, and it closed the quarter with $2.5bn in outstanding hedges.

Another way in which the company is attempting to offset pressure on its margins is by increasing the prices it charges to existing clients when current deals come up for renewal. During the first quarter, pricing rose 0.6%, and said it was looking at a raise of between 3% to 5% on forthcoming renewals.

The size of engagements that TCS is taking on is increasing and it ended the quarter with six clients contributing more than $100m in revenue compared to just one 12 months previously, and the company said that it is pursuing a further 20 deals worth a minimum of $50m apiece.

TCS added a huge 8,706 new employees during the quarter, but it is far from the only supplier that is recruiting heavily in India. The competitive nature of the labor market means that domestic salary levels are increasing, with wages accounting for 11.7% of its SG&A expenses, up from 9.8% in the year ago period.

TCS also has to recruit elsewhere, having opened delivery centers in China, Latin America and Eastern Europe in recent years. Some 9.4% of the company’s 94,902 employees at the end of the quarter were foreign nationals.

The company is proving as good as any of its peers in handling the human resources challenge, and its staff attrition rate rose to 11.5% in the quarter from 10.6% in the year-ago period, with 11% in its IT services business and 16.7% in its business process outsourcing unit.

The company announced its results after trading had ended on the Bombay Stock Exchange on Monday.