Mumbai, Jan 12 (UNI) Tata Consultancy Services (TCS) officially announced a decline in its profit after tax (PAT) for the third quarter of the financial year (Q3 FY26), on Monday, though its revenue rose by 5%.
The company has attributed its Q3 FY26 PAT decline to a one-time charge related to the labour code and legal claims, along with restructuring expenses, according to its statement.
TCS posted a 13.9% (calculated as 14%) year-on-year (YoY) decline in its consolidated net profit to Rs 10,657 crore as compared to Rs 12,380 crore for the same period last year. On a sequential basis, PAT was lower by 11.7% from Rs 12,075 crore posted in the previous September quarter of FY26.
The decline in Q3 FY26 PAT was despite a marginal growth of almost 5% YoY in the company’s topline during the period under review to Rs 67,087 crore from Rs 63,973 crore in Q3FY25. On a sequential basis, TCS has seen a 2% rise, while in constant currency terms, its revenue growth stood at 0.8%.
The company’s bottom line was impacted after it provided for certain exceptional items during the quarter, including the provisions for a one-time charge related to the labour code besides legal claims, along with restructuring expenses.
TCS stated that the statutory impact of new labour codes of Rs 2,128 crore, comprised Rs 1,816 crore towards gratuity and Rs 312 crore towards long-term compensated absences, which primarily arose due to changes in the wage definition under the new labour code.
TCS also made a provision towards a legal claim of Rs 1,010 crore pertaining to a 2019 claim filed by an American company called Computer Sciences Corporation (CSC) against TCS, in the US District Court for the Northern District of Texas, Dallas Division, alleging “misappropriation of trade secrets as well as other confidential information” belonging to CSC.
However, the company’s net income stood at Rs 13,438 crore, a growth of 8.5% YoY with net margins rising to 20%, a growth of 60 basis points for the year and 40 basis points sequentially.
The total contract value (TCV) stood at US $9.3 billion, but missed estimates of US $11 billion which brokerages had pegged for Q3 FY26.
TCS announced a bumper payout of Rs 57 per share as a dividend, including a third interim dividend of Rs 11 and a special dividend of Rs 46.
“The third interim dividend and the special dividend shall be paid on Tuesday, February 3, 2026, to the equity shareholders of the Company, whose names appear on the Register of Members of the Company or in the records of the Depositories as beneficial owners of the shares as on Saturday, January 17, 2026, which is the Record Date fixed for the purpose,” according to the TCS statement.
