Markets closed on a positive note despite volatile trading, with investors focusing on third-quarter earnings from major IT companies and various corporate developments across sectors.

IT Sector Results

Tata Consultancy Services reported a significant decline in its December quarter performance, with consolidated net profit falling 14% year-on-year. HCL Technologies also faced similar challenges, posting an 11% drop in quarterly profits despite revenue growth.

HCL Technologies showed resilience in revenue generation, with operations revenue reaching ₹33,872 crore in Q3FY26, representing a 13% increase from ₹29,890 crore in the corresponding period last year.

Corporate Developments

Ola Electric's Market Expansion

Ola Electric announced a significant milestone with the rollout of its first battery energy storage system, Shakti, from its manufacturing plant in Krishnagiri, Tamil Nadu. This development marks the company's strategic entry into India's residential battery energy storage system market, expanding beyond its traditional automotive domain.

Strategic Acquisitions and Partnerships

Larsen & Toubro completed a major acquisition by purchasing the remaining 40% stake in L&T Sapura Shipping Private Limited from Sapura Nautical Power Pte Ltd for ₹122.4 crore. This transaction makes the offshore marine construction company a wholly owned subsidiary of L&T.

TVS Supply Chain Solution secured a three-year contract from Daimler India Commercial Vehicles to manage in-plant warehouse operations at the German truckmaker's Chennai manufacturing facility. The partnership will focus on end-to-end warehouse operations, material flow optimization, and enhanced operational efficiency.

Brand and Industry Milestones

Indian Hotels Company achieved a historic milestone by securing trademark registration for the 'Taj' sonic sound, becoming the first brand in India's hospitality sector to obtain sound mark registration. This legal protection recognizes sound as a core brand asset and safeguards the Taj brand's distinctive sonic identity.

Reliance Industries clarified that its battery storage manufacturing plans remain unchanged, responding to reports suggesting the conglomerate had paused lithium-ion battery cell manufacturing plans in India due to challenges in securing Chinese technology.

Market Outlook

Several companies including ICICI Pru Life, ICICI Lombard, Tata Elxsi, and Just Dial are scheduled to announce their third-quarter results, which will provide further insights into sectoral performance and market trends.

Tata Consultancy Services delivered a mixed performance in its third quarter results, with revenue growth offsetting a decline in profitability. The IT services giant reported sequential revenue growth while maintaining healthy operating margins, though net profit fell short of market expectations.

Financial Performance Overview

The company's Q3 financial metrics present a contrasting picture of operational strength and profit pressure:

Revenue Growth and Operational Efficiency

TCS achieved revenue of ₹67,000 crores in Q3, representing a 1.8% increase from the previous quarter's ₹65,799 crores. This performance slightly exceeded analyst estimates of ₹66,728 crores, demonstrating the company's ability to maintain growth momentum. The revenue expansion reflects continued demand for the company's IT services and digital transformation solutions.

Operational efficiency showed improvement with EBIT rising to ₹16,900 crores from ₹16,336 crores in the previous quarter. The EBIT margin expanded by 34 basis points to 25.17%, nearly matching analyst expectations of 25.20% and indicating effective cost management.

Profitability Challenges

Despite revenue growth and margin improvement, net profit declined significantly to ₹10,650 crores from ₹12,070 crores in the previous quarter, marking an 11.8% sequential decrease. This result fell considerably short of analyst estimates of ₹12,771 crores, suggesting potential impact from higher tax provisions, interest costs, or other below-the-line items.

Shareholder Returns

TCS announced substantial returns to shareholders through its dividend policy:

The combined dividend of ₹57 per share represents a significant payout to shareholders, with the special dividend of ₹46 per share being particularly noteworthy. This substantial distribution demonstrates the company's strong cash position and commitment to returning value to investors.

Market Performance Assessment

The Q3 results reflect TCS's resilience in maintaining revenue growth and operational efficiency despite challenging market conditions. While the revenue performance exceeded expectations and margins remained healthy, the decline in net profit highlights areas requiring management attention. The generous dividend announcement, particularly the special dividend, signals confidence in the company's financial strength and future prospects.