Tata Consultancy Services (TCS), India’s largest IT services company, on Monday reported its third-quarter (Q3 FY26) earnings, showing profit pressure amid steady revenue growth.
Key Financial Highlights – Q3 FY26
- Consolidated Profit After Tax (PAT): ₹10,657 crore, down about 14 % year-on-year from ₹12,380 crore in the December quarter of the previous year.
- Revenue from Operations: ₹67,087 crore, up 5 % YoY, reflecting continued business activity despite mixed demand trends.
- The sequential net profit also declined compared to ₹12,075 crore in the preceding quarter.
Dividend and Payout
The company announced an interim dividend of ₹57 per equity share, comprising a third interim dividend of ₹11 and a special dividend of ₹46 per share, which will be paid on February 3, 2026, with the record date on January 17, 2026.
Management Commentary & Business Drivers
TCS’s leadership highlighted ongoing momentum in digital demand and AI-related services, with its AI segment generating significant revenue — about $1.8 billion annualised. The company continues to focus on becoming an AI-led technology services provider, driven by strategic investments across cloud, data and automation capabilities.
A portion of the profit decline was attributed to the impact of India’s new labour codes, which led to statutory expenses affecting reported PAT figures.
Business Trends & Market Reaction
Despite the dip in profitability, the revenue growth and strong dividend payout helped temper market concerns. TCS’s performance reflects a soft global IT spending environment, with moderate demand particularly in large markets such as North America and Europe, while newer demand streams around AI and digital transformation helped support revenues.
In Summary:
- PAT fell ~14 % YoY to ₹10,657 crore.
- Revenue rose ~5 % YoY to ₹67,087 crore.
- Strong dividend declared — ₹57 per share.
- AI services and digital demand were positive contributors amid a conservative IT budget environment.
