Tata Consultancy Services (TCS), India’s largest IT services firm, reported a 14 per cent year-on-year decline in net profit for the third quarter (Q3) ended December 2025, weighed down by large exceptional charges linked to restructuring, labour law changes and a legal dispute in the US.
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The company’s consolidated net profit for the December quarter fell 14 per cent on-year to Rs 10,657 crore from Rs 12,380 crore a year ago. Revenue for the quarter rose 4.58 per cent year-on-year to Rs 68,205 crore from Rs 65,216 crore in the same period a year ago.
However, the IT major posted steady sequential growth and announced a hefty dividend of Rs 57, including a special dividend of Rs 46. The record date for the dividend is January 17, 2026. A major portion of the dividend will be accrued to Tata Sons, the holding company, which owns 71.77 per cent stake in TCS.
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TCS said re-structuring expenses were Rs 253 crore and Rs 1,135 crore in the three months ended December 2025 and September 2025, respectively. Statutory impact of new labour codes was at Rs 2,128 crore in three and nine months ended December 31, 2025. Provision towards legal claim was Rs 1,010 crore in three and nine months ended December 2025.
K Krithivasan, MD and CEO, said, “The growth momentum we witnessed in Q2FY26 continued in Q3FY26. We remain steadfast in our ambition to become the world’s largest AI-led technology services company, guided by a comprehensive five-pillar strategy.”
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“Our AI services now generate $1.8 billion in annualized revenue, reflecting the significant value we provide to clients through targeted investments across the entire AI stack, from Infrastructure to Intelligence,” he said.
TCS shares closed 0.86 per cent higher at Rs 3235.70 on the BSE on Monday.
“We continued to see AI acceleration this quarter. We helped customers identify valuable AI opportunities through Innovation Days and deployed solutions faster with Rapid Builds. Our customers continue to invest in Cloud, Data, Cyber and Enterprise Transformations to build readiness for AI. We further strengthened our Salesforce capabilities with Coastal Cloud acquisition, building on our investment in ListEngage,” said Aarthi Subramanian, Executive Director – President and Chief Operating Officer.
“Our sustained margin performance and strong cash conversion this quarter, reflects our disciplined execution and financial resilience. Backed by a robust balance sheet, we continue to invest confidently in strategic growth areas,” said Samir Seksaria, Chief Financial Officer. “Executing our five-pillar AI strategy at speed and scale is central to our transformation into an AI-first enterprise, and delivering long-term value for our stakeholders,” he said.
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