Birlasoft Limited has received a penalty notice of USD 25,000 from the US Internal Revenue Service (IRS) related to compliance issues with its US branch operations. The IT services company disclosed this development to the stock exchanges on February 27, 2026, in accordance with regulatory requirements under SEBI listing obligations.

Penalty Details and Background

The penalty was imposed by the Department of Treasury's Internal Revenue Service for the company's failure to provide required information regarding its US branch operations for the financial year 2024-25. The company received the official notice on February 26, 2026.

Company's Response and Remedial Actions

Birlasoft has taken immediate steps to address the compliance issue. The company confirmed that it has already filed the required forms and provided all necessary information to the US authorities. Additionally, Birlasoft is actively pursuing an application for revocation of the imposed penalty.

The company emphasized in its disclosure that the necessary documentation has been submitted subsequent to receiving the penalty notice, demonstrating its commitment to regulatory compliance across its international operations.

Financial and Operational Impact

According to the company's assessment, the penalty is not expected to have any material impact on its financial performance, operations, or other business activities. The USD 25,000 penalty amount represents a relatively minor financial exposure for the IT services provider.

The disclosure was made in compliance with Regulation 30 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, ensuring transparency with shareholders and the investment community regarding regulatory developments affecting the company's operations.

Birlasoft Limited announced its Q3FY26 financial results for the quarter ended December 31, 2025, showing a mixed performance with sequential growth but year-over-year decline in key metrics. The IT services company reported consolidated net profit of ₹1,198.89 million, representing a 2.5% decline from ₹1,169.42 million in the corresponding quarter of the previous year, though showing a 3.3% improvement from the previous quarter.

Financial Performance Overview

The company's financial performance for Q3FY26 reflected both challenges and resilience across different metrics:

Revenue from operations stood at ₹13,475.32 million, down 1.1% year-over-year but up 1.4% sequentially from ₹13,289.03 million in Q2FY26. Total income reached ₹13,609.42 million, including other income of ₹134.10 million.

Impact of New Labour Codes

A significant development during the quarter was the implementation of new labour codes, which created a substantial exceptional charge:

On November 21, 2025, the Government of India notified provisions of the Code on Wages, 2019, the Industrial Relations Code, 2020, the Code on Social Security, 2020 and the Occupational Safety, Health and Working Conditions Code, 2020. These labour codes consolidate twenty-nine existing labour laws into a unified framework governing employee benefits during employment and post-employment.

Segment-wise Performance

Birlasoft's business segments showed varied performance during Q3FY26:

The Manufacturing segment remained the largest contributor with ₹5,086.35 million in revenue, though down from ₹5,471.79 million in Q3FY25. Banking, Financial Services and Insurance segment maintained stable performance at ₹3,281.05 million. Life Sciences & Services showed growth to ₹2,855.76 million from ₹2,726.91 million year-over-year.

Nine-Month Performance

For the nine months ended December 31, 2025, Birlasoft's performance reflected ongoing market challenges:

The nine-month period showed revenue decline of 2.4% to ₹39,613.33 million, while net profit decreased 13.2% to ₹3,424.25 million, primarily impacted by the exceptional charge and market conditions.

Standalone Results

Birlasoft's standalone performance for Q3FY26 showed stronger revenue growth compared to consolidated results, with revenue reaching ₹7,495.95 million, up from ₹6,603.14 million in Q3FY25. Standalone net profit was ₹656.09 million compared to ₹578.87 million in the previous year, representing a 13.3% increase despite the labour code impact.

The Board of Directors approved these unaudited financial results at their meeting held on January 28, 2026, with the results being reviewed by the Audit Committee and receiving an unmodified conclusion from statutory auditors S R B C & CO LLP.