TCS reported ₹67,087cr revenue in Q3, beating estimates with 4.8% growth
Net profit fell 13.9% to ₹10,657cr due to legal and restructuring provisions
Annualized AI revenue reached $1.8bn, surging 17.3% sequentially in constant currency
Tata Consultancy Services (TCS) reported a mixed set of results for the December quarter, with revenue beating expectations but profit taking a hit due to one-off charges. Consolidated revenue rose 4.8% year-on-year to ₹67,087 crore, while net profit fell 13.9% to ₹10,657 crore, missing.
The company said the decline in profit was largely driven by restructuring expenses linked to the implementation of new wage and labour codes, one-time transition costs, and a ₹1,010 crore provision for a legal matter. On a sequential basis, profit fell 11.7%, even as revenue grew 2% quarter-on-quarter, or 0.8% in constant currency terms.
1 January 2026
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Order momentum showed signs of moderation. Total contract value (TCV) for the quarter stood at $9.3 billion, down from $10 billion in the previous quarter and slightly below the $9.4 billion reported in Q1 FY26. Even so, TCS highlighted strong traction in artificial intelligence-led services, with annualised AI revenue rising 17.3% sequentially to $1.8 billion.
Geographic Performance
North America, TCS’s largest market, grew 1.3% year-on-year, while Latin America and continental Europe posted sequential growth. The UK remained a weak spot, contracting both sequentially and year-on-year. India revenues rebounded sharply on a sequential basis but were down significantly from a year earlier, reflecting volatility in large domestic deals.
By sector, BFSI remained the largest contributor and grew modestly year-on-year, while consumer business saw a decline on an annual basis. Life sciences and healthcare posted steady growth. Operating margins remained resilient at 25.2%, and management emphasised strong cash generation during the quarter.
Shareholder Dividends
TCS also announced an interim dividend of ₹11 per share and a special dividend of ₹46 per share, underscoring its continued focus on shareholder returns despite near-term earnings pressure. Headcount declined by over 11,000 employees sequentially to 582,163, as the company continued rationalisation and efficiency measures.
Management reiterated its long-term strategy to become a leading AI-led services company. CEO K Krithivasan pointed to sustained demand for AI, cloud, data and cybersecurity services, while highlighting investments across the AI stack and large-scale employee upskilling. The company now has more than 217,000 associates with advanced AI skills.
