Market Performance: A Mixed Quarter for TCS
The TCS Q3 results tell a story of stability on the revenue front but pressure on profitability.
While business continued to flow in, the bottom line took a hit due to one-time costs booked during the quarter.
For investors tracking TCS Q3 Results, this quarter stands out—not because demand slowed sharply, but because accounting changes and legal provisions changed the profit picture.
Revenue moved up.
Profit moved down.
That contrast defined the quarter.
Main News: What Stood Out in TCS Q3 Results
Tata Consultancy Services reported a 13.9% year-on-year drop in net profit for the third quarter, even as revenue grew in low single digits.
Here’s the core snapshot from the TCS Q3 results:
- Net Profit (PAT): ₹10,657 crore
- Down from ₹12,380 crore in Q3FY25
- Lower by 11.7% sequentially from ₹12,075 crore
- Revenue: ₹67,087 crore
- Up nearly 5% YoY from ₹63,973 crore
- Grew 2% sequentially
- Constant Currency Revenue Growth: 0.8%
The numbers show that core operations remained steady. The pressure came from items that sat below the operating line.
Why Did TCS Q3 Profit Decline?
The fall in profit during Q3 was driven by exceptional and one-time provisions booked during the quarter.
TCS provided for multiple items, which together weighed on reported profits:
Key One-Time Provisions in Q3
- Labour Code Impact: ₹2,128 crore
- ₹1,816 crore towards gratuity
- ₹312 crore towards long-term compensated absences
- Triggered by changes in wage definitions under new labour codes
- Legal Provision: ₹1,010 crore
- Related to a legal claim filed in 2019
- Case filed by Computer Sciences Corporation (CSC) in the US
- Allegations linked to trade secrets and confidential information
- Restructuring-related costs were also accounted for during the quarter
These provisions were the primary reason the TCS Q3 profit declined, despite revenue growth.
Income and Margins: Operational Strength Shows Through
Even with one-time costs impacting net profit, operational numbers showed resilience.
- Net Income: ₹13,438 crore
- Up 8.5% YoY
- Net Margin: 20%
- Improved by 60 basis points YoY
- Up 40 basis points sequentially
The margin expansion signals that underlying business efficiency remained intact during the quarter.
Dividend Announcement: TCS Declares ₹57 Per Share
Alongside the TCS Q3 results, the company announced a sizeable dividend payout.
- Total Dividend: ₹57 per share
- Third Interim Dividend: ₹11 per share
- Special Dividend: ₹46 per share
Key Dates
- Record Date: Saturday, January 17, 2026
- Dividend Payment Date: Tuesday, February 3, 2026
The dividend will be credited to shareholders whose names are listed in the company’s register of members or reflected in the depository records as of the record date.
Company Details: Tata Consultancy Services at a Glance
Tata Consultancy Services is India’s largest IT services company, with operations spread across:
- IT services
- Engineering and R&D services
- Products and digital platforms
The TCS Q3 results reflect a quarter where core demand stayed steady, even as compliance-related costs influenced reported profits.
Summary: TCS Q3 Results in One View
The TCS Q3 Results highlight a quarter shaped more by accounting adjustments than business weakness.
- Revenue growth remained stable
- Profit fell due to one-time labour code and legal provisions
- Margins improved, showing operational discipline
- A large dividend payout added a shareholder-friendly touch
In short, Q3 was less about slowdown—and more about settling past obligations while keeping the engine running.
Source: Livemint
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