Tata Consultancy Services has reported robust operational performance in Q3, with EBIT reaching ₹169.00 billion, marking a sequential improvement from the previous quarter. The IT services major demonstrated strong execution capabilities while maintaining healthy profitability margins.

Financial Performance Overview

The company's Q3 financial metrics showcase consistent operational strength across key parameters:

Market Expectations and Performance

TCS's Q3 results demonstrated the company's ability to meet and exceed market expectations. The operational performance reflected disciplined execution and effective cost management strategies.

Operational Efficiency Trends

The quarter-on-quarter improvement in both absolute EBIT and margin performance indicates strong operational discipline. The EBIT increase of ₹5.64 billion from the previous quarter, coupled with margin expansion of 34 basis points, reflects the company's focus on profitable growth and operational optimization.

The slight variance between actual and estimated margin performance, with actual margin at 25.17% compared to the estimated 25.20%, demonstrates the company's consistent delivery against market expectations while maintaining operational excellence.

Tata Consultancy Services announced its audited financial results for the quarter and nine-month period ended December 31, 2025, revealing mixed performance amid significant exceptional charges. The IT services giant reported consolidated revenue growth but faced profitability pressures due to one-time expenses and regulatory impacts.

Financial Performance Overview

The company's consolidated financial results showed revenue from operations of ₹67,087 crore for Q3FY26, representing growth from ₹63,973 crore in the corresponding quarter of the previous year. However, net profit attributable to shareholders declined to ₹10,657 crore from ₹12,380 crore in Q3FY24.

For the nine-month period ended December 31, 2025, the company reported revenue from operations of ₹1,96,323 crore compared to ₹1,90,845 crore in the corresponding period of the previous year, while net profit stood at ₹35,492 crore versus ₹36,329 crore.

Exceptional Items Impact

The quarter's performance was significantly affected by exceptional items totaling ₹3,391 crore, which included three major components:

The restructuring expenses relate to the company's initiative announced in July 2025 to release certain associates whose deployment may not be feasible. The statutory impact of new Labour Codes stems from the Government of India's notification of four consolidated labour laws on November 21, 2025, primarily affecting gratuity and long-term compensated absences due to changes in wage definition.

Segment Performance

The company's segment-wise revenue performance showed varied results across different verticals:

Banking, Financial Services and Insurance remained the largest segment, contributing ₹25,889 crore in revenue, while Communication, Media and Technology experienced a decline from the previous year.

Legal Developments and Acquisitions

The company made a provision of ₹1,010 crore related to the ongoing legal case with Computer Sciences Corporation (CSC). On November 21, 2025, the Fifth Circuit affirmed the District Court's liability rulings but vacated the previously granted injunction. The company has filed petitions for rehearing, which were denied on December 19, 2025.

On the acquisition front, TCS completed the purchase of ListEngage Midco, LLC and its subsidiary ListEngage, LLC on October 10, 2025, for $69 million (₹610 crore). The company also signed a definitive agreement to acquire Coastal Cloud Holdings, LLC for $700 million (₹6,294 crore).

Dividend Declaration

Despite the challenging quarter, the Board of Directors declared a third interim dividend of ₹11.00 per equity share and a special dividend of ₹46.00 per equity share. The combined dividend of ₹57.00 per share will be paid on February 3, 2026, to shareholders on record as of January 17, 2026.

The results were approved by the Board of Directors at their meeting held on January 12, 2026, and have received an unmodified audit opinion from the statutory auditors.