The growth of India's services sector quickened in April, with the seasonally adjusted HSBC India Services PMI Business Activity Index rising to 58.7 from 58.5 in March, according to data from S&P Global released Tuesday.

"This regained momentum was largely driven by a quicker increase in new order inflows, which also underpinned a faster expansion in employment," the report said.

The overall increase in output was driven by new business intakes, as companies took advantage of improving demand conditions.

The finance and insurance sectors had the strongest performance for both output and new orders.

"Margins improved as cost pressures eased and prices charged rose at a faster pace. Though firms remained optimistic about future growth, their confidence waned slightly," said Pranjul Bhandari, Chief India Economist at HSBC.

Due to the strong growth in the manufacturing and services sector, the HSBC India Composite PMI Output Index increased to 59.7 in April from 59.5 in March.