Mumbai, January 12, 2026: Tata Consultancy Services (TCS), India’s premier IT services firm, today announced its financial results for the third quarter of FY26. While the company reported a resilient 5% growth in revenue driven by strong AI demand, net profit saw a sharp decline due to significant one-time exceptional provisions. To reward shareholders, the Board has declared a massive total dividend of ₹57 per share.
Key Financial Highlights (Q3 FY26)
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Revenue: ₹67,087 crore, up 5% YoY and 2% QoQ.
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Net Profit: ₹10,657 crore, down 14% YoY (impacted by exceptional items).
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Operating Margin (EBIT): Robust at 25.2%, up 70 bps YoY.
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Dividend: Total of ₹57 per share (₹11 Interim + ₹46 Special Dividend).
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Order Book: Total Contract Value (TCV) at $9.3 billion.
Quarterly Performance Comparison
| Metric (in ₹ Crore) | Q3 FY26 (Actual) | Q2 FY26 (QoQ) | Q3 FY25 (YoY) | QoQ Change | YoY Change |
| Revenue | 67,087 | 65,799 | 63,973 | +2.0% | +4.9% |
| Net Profit | 10,657 | 12,075 | 12,380 | -11.7% | -13.9% |
| EBIT Margin | 25.2% | 25.2% | 24.5% | Flat | +70 bps |
Exceptional Items Breakdown
The reported profit of ₹10,657 crore reflects a total deduction of ₹3,138 crore in one-time charges. Without these items, net profit would have stood at approximately ₹13,795 crore (+11% YoY).
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New Labour Codes: A ₹2,128 crore provision following the GoI notification of new labor regulations impacting employee benefit liabilities.
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Legal Provision: A ₹1,010 crore charge for ongoing legal matters and potential settlement liabilities.
Management Commentary
K Krithivasan, CEO and MD:
“Our growth momentum continued despite seasonal headwinds. We are successfully moving GenAI from pilots to production, with our annualized AI revenue now reaching $1.8 billion. Our strategy remains focused on being the world’s leading AI-led technology partner.”
Samir Seksaria, CFO:
“Maintaining a 25.2% operating margin in a challenging environment demonstrates our operational rigour. The special dividend reflects our confidence in our strong cash-generation capabilities despite the one-time statutory impacts.”
Operational Highlights
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AI Pivot: AI services grew 17.3% QoQ in constant currency, now accounting for a significant portion of the growth pipeline.
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Vertical Performance: Growth was led by the BFSI sector (31.9% of revenue) and Consumer Business (+1.3% QoQ).
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Workforce: Total headcount stands at 607,354. Attrition remained stable at 13.0%, showing improved talent retention.
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Major Wins: Notable 15-year contract with Ireland’s Department of Social Protection for digital retirement solutions.
Balance Sheet & Order Book
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Cash Position: TCS remains net-debt free with high cash conversion (Net Income to OCF at 130.4%).
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Deal Pipeline: The $9.3 billion TCV provides a steady revenue floor for the upcoming quarters, though it reflects continued caution in discretionary spending by global clients.
Investor Takeaway
The headline “profit miss” is largely technical. Once the ₹3,138 crore in one-time legal and labor provisions are adjusted, TCS’s core operations appear stronger than the previous year. The expansion of margins to 25.2% and the aggressive AI revenue growth ($1.8B) are significant positives. While North American discretionary spend remains cautious, the ₹57 dividend serves as a strong signal of financial health, making the profit dip a temporary setback rather than a structural issue.
Disclaimer: This article is for informational purposes only and does not constitute financial or investment advice. Investors should perform their own due diligence or consult a certified advisor before making investment decisions.