Mumbai, January 12, 2026: Tata Consultancy Services on Monday reported a sharp 13.91 percent year-on-year decline in consolidated net profit for the December quarter of FY26, primarily due to a one-time statutory impact arising from the implementation of new labour codes.
One-Time Impact Weighs on Bottom Line
The country’s largest IT services company posted a net profit of ₹10,657 crore for the quarter ended December 31, 2025, compared with ₹12,380 crore in the corresponding quarter of the previous year and ₹12,075 crore in the September quarter.TCS clarified that the rollout of new labour codes during the quarter resulted in a one-time statutory impact of ₹2,128 crore. Excluding this impact, net profit would have risen 8.5 percent year-on-year to ₹13,438 crore, indicating underlying operational resilience.
Revenue Growth Remains Steady
Revenue from operations for the quarter increased 4.86 percent year-on-year to ₹67,087 crore, up from ₹63,973 crore in the year-ago period.The company maintained its operating performance, with the operating margin stable at 25.2 percent, unchanged sequentially and higher than 24.5 percent reported in the December quarter of FY25.
Headcount Declines Amid Restructuring
TCS reported a net reduction of 11,151 employees during the quarter, taking total headcount to 5,82,163 as of December 31, 2025.Earlier in the year, the company had announced plans to lay off around 12,000 employees as part of a restructuring exercise. In the September quarter, total headcount had declined by 19,755, with the company indicating that only about 6,000 of those were involuntary exits linked to restructuring.
Management Commentary and AI Momentum
Chief Executive Officer and Managing Director K Krithivasan said the growth momentum seen in the September quarter continued into the December quarter, despite a challenging global environment.He highlighted that annualised revenues from artificial intelligence rose over 17 percent to USD 1.8 billion, underlining growing traction in AI-led transformation deals.
Total Contract Value for new deal wins during the quarter stood at USD 9.3 billion, reflecting sustained client demand for large, multi-year engagements.
Geography-Wise Performance
Domestic business underperformed during the quarter, with India revenues declining over 34 percent year-on-year, reducing its share of total revenue to 6.1 percent, down from 9.8 percent in the year-ago period.In international markets, North America revenues grew 1.3 percent year-on-year, while UK revenues declined 3.2 percent in constant currency terms, amid ongoing geopolitical and macroeconomic uncertainties.
Dividend Announcement and Market Reaction
The board of directors recommended a dividend of ₹57 per share, which includes a special dividend of ₹46 per share, reflecting continued shareholder payout despite the one-time profit impact.On the stock market, the TCS share price ended the session 0.86 percent higher at ₹3,235.70 on the BSE.
About the Company
Tata Consultancy Services is India’s largest IT services and consulting company and a key part of the Tata Group. The company provides technology, consulting, and digital transformation services to global enterprises across industries and remains one of the largest private-sector employers in the country.Source:
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