TCS To Take Additional $70 Mn Hit After US Supreme Court Rejects Appeal

Tata Consultancy Services (TCS) will take an additional charge of $70 million (approximately ₹665 crore) in the first quarter of FY27 after the US Supreme Court declined to hear its appeal in a long-running trade secrets dispute with DXC Technology, bringing the litigation closer to its conclusion.

In an exchange filing, TCS said the US Supreme Court had denied its petition seeking a review of the judgment passed by the United States Court of Appeals for the Fifth Circuit.

"The United States Supreme Court has denied our petition for a writ of certiorari to review the judgment of the United States Court of Appeals for the Fifth Circuit," the company said.

TCS added that it had already set aside $150 million (around ₹1,425 crore) in its books in connection with the case. Following the latest development, the company will now provide the remaining $70 million, taking the total provision to about $220 million (nearly ₹2,090 crore).

"The Company has already provided USD 150 million in relation to this matter in the books of accounts in accordance with applicable accounting standards and will make necessary provision now for the incremental amount of USD 70 million towards damages, interest and legal cost, as a one-time exceptional expense, in Q1 FY2027," TCS said.

Long-running dispute

The case traces its origins to a lawsuit filed in 2019 by Computer Sciences Corporation (CSC), which later became part of DXC Technology.

CSC alleged that TCS hired around 2,200 employees from insurance company Transamerica and improperly used their access to CSC's proprietary software and confidential information to develop a competing life-insurance platform.

TCS consistently denied the allegations, arguing that the information involved was neither confidential nor improperly obtained and that its access to the software was lawful.

Court rulings

In 2023, a US jury recommended damages of $210 million against TCS for willful misappropriation of trade secrets.

However, US District Judge Brantley Starr subsequently reduced the award to $168 million, comprising $56 million in compensatory damages and $112 million in punitive damages.

The reduced award was upheld by the Fifth US Circuit Court of Appeals in 2025, prompting TCS to seek intervention from the US Supreme Court.

TCS argued that DXC had been awarded damages without proving actual losses and that the punitive damages were excessive under US trade secret laws.

DXC countered that the appellate court had merely applied settled legal principles and that the case did not warrant further review. With the Supreme Court refusing to hear the appeal, the lower court's judgment remains in force.

Limited operational impact

While the additional provision will weigh on TCS' first-quarter earnings, the charge is expected to be treated as a one-time exceptional expense rather than an operational cost.

The additional $70 million provision represents roughly ₹665 crore at an exchange rate of ₹95 per US dollar, while the total provision of $220 million translates to nearly ₹2,090 crore.

The development comes at a time when investors are closely tracking the performance of Indian IT companies amid concerns over global technology spending, artificial intelligence-led disruption and slowing discretionary demand in key overseas markets.