TCS Q3 results: Cons PAT down 14% YoY to Rs 10,657 crore, but revenue up 5%

Indian IT vendor Tata Consultancy Services (TCS) on Monday reported a 14% year-on-year (year-on-year) decline in consolidated net profit for the December quarter to Rs 10,657 crore, compared to Rs 12,380 crore in the year-ago period. The profit after tax (PAT) is attributable to the shareholders of the company.Revenue from operations in the third quarter rose 5% year-on-year to Rs 67,087 crore, compared to Rs 63,973 crore in the corresponding quarter of the previous fiscal.

The company announced an interim dividend of Rs 57 per equity share for FY26, comprising a third interim dividend of Rs 11 per equity share and a special dividend of Rs 46 per equity share.

Both dividends will be paid on Tuesday, February 3, 2026. The company has set a record date of Saturday, January 17, 2026.

TCS’s operating profit fell 12% sequentially from Rs 12,075 crore in the second quarter, while revenue rose 2% from Rs 65,799 crore in the July-September quarter.

Take control

Commenting on the company’s earnings, MD and CEO K Krithivasan said the growth momentum witnessed by the company in Q2FY26 continued in Q3FY26. “We remain steadfast in our ambition to become the world’s largest AI-led technology services company, guided by a comprehensive, five-pillar strategy. Our AI services now generate $1.8 billion in annualized revenue, reflecting the significant value we deliver to customers through targeted investments across the entire AI stack, from infrastructure to intelligence.”

On the company’s AI-led initiatives, Executive Director-President and Chief Operating Officer Aarthi Subramanian said TCS continued to see AI acceleration this quarter. “We helped customers identify valuable AI opportunities through Innovation Days and deploy solutions faster with Rapid Builds. Our customers continue to invest in cloud, data, cyber and enterprise transformations to build AI readiness. We further strengthened our Salesforce capabilities with the acquisition of Coastal Cloud, building on our investment in ListEngage.”

The impact of new labor laws

The company reported a statutory impact of the new labor laws at Rs 2,128 crore. The Government of India notified the four labor laws on November 21, 2025.

Key Takeaways

– TCS’s annualized AI services revenue was $1.8 billion, up 17.3% quarter-over-quarter at constant exchange rates.
– Operating margin was 25.2%, while net margin was 20%, up 40 basis points quarter-on-quarter.
– Cash flow from operating activities amounted to 130.4% of net profit.
– Total contract value (TCV) for the third quarter was $9.3 billion.