TCS Q3 results: From profit, revenue to deal wins- 5 key highlights from December quarter earnings

TCS Q3 results: IT major Tata Consultancy Services (TCS) on Monday, January 12, reported a nearly 14% year-on-year (YoY) fall in its consolidated profit at ₹10,657 crore for the December quarter of the current financial year. In the same quarter last year, the company's profit was ₹12,380 crore.

Revenue from operations for the quarter, however, rose nearly 5% YoY to ₹67,087 crore from ₹63,973 crore in the same quarter last year. On the other hand, in constant currency (CC) terms, TCS reported a 2.6% YoY fall but a modest 0.8% QoQ growth in revenue.

The company stated that its profitability was impacted by a one-time charge of ₹2,128 crore due to the implementation of new labour laws. It also made a provision towards a legal claim of ₹1,010 crore during the December quarter.

Operating income for the quarter stood at ₹16,889 crore against ₹15,657 crore YoY. Operating margin for the quarter came at 25.2% compared to 24.5% YoY.

"The growth momentum we witnessed 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," said K Krithivasan, Chief Executive Officer and Managing Director, TCS.

"Our AI services now generate $1.8 billion in annualised revenue, reflecting the significant value we provide to clients through targeted investments across the entire AI stack, from Infrastructure to Intelligence,” Krithivasan said.

TCS Q3 results: Five key highlights

1. AI services see healthy growth

Annualised AI services revenue stood at $1.8 billion, rising 17.3% QoQ in constant currency.

“We continued to see AI acceleration this quarter. We helped customers identify valuable AI opportunities through innovation days and deployed solutions faster with rapid builds," said Aarthi Subramanian, Executive Director - President and Chief Operating Officer, TCS.

"Our customers continue to invest in cloud, data, cyber and enterprise transformations to build readiness for AI. We further strengthened our Salesforce capabilities with the Coastal Cloud acquisition, building on our investment in ListEngage,” said Subramanian.

2. Growth by domain and markets

Among the key business domains, BFSI saw a 1.6% YoY growth in CC. 'Life sciences and healthcare' and 'energy, resources and utilities' segments saw growth of 2.2% YoY each.

However, the'regional markets and others' domain saw a significant 19.4% YoY degrowth.

The consumer business segment also shrank by 2.7% YoY.

Among the key markets, the Indian market de-grew by 34.3% YoY. In Europe, the UK's market shrank by 3.2% YoY.

On the other hand, the MEA market grew by 8.3%, while the Asia Pacific saw a 3.5% YoY growth.

The North American market grew by 1.3% YoY, while Latin America saw a growth of 1.4% YoY.

3. Deal TCV

TCS said its Q3 total contract value (TCV) stood at $9.3 billion.

Among the key deals during the quarter were:

(i) An agreement to acquire a 100% stake in Coastal Cloud.

(ii) Announced a strategic partnership with TPG, a leading global alternative asset management firm, to support the growth of TCS’s AI data centre business, HyperVault.

(iii) TCS expanded its long-standing partnership with Google Cloud, adopting the next-generation agentic AI platform, Gemini Enterprise.

(iv) Expanded 18-year partnership with ABB, a global leader in electrification and automation.

(v) Expanded partnership with Aviva, the UK’s leading Insurance, Wealth and Retirement provider.

4. Update on headcount

TCS said its voluntary LTM attrition stood at 13.5% in IT services. Total employee base shrank to 5,82,163 by the end of Q3FY26 compared to 5,93,314 by the end of Q2FY26.

TCS's Chief HR Officer, Sudeep Kunnumal, informed that as of the December quarter, there were over 2,17,000 associates with advanced AI skills.

"We doubled our intake of fresh graduates with higher-order skills, rapidly expanding our next-generation talent pool. The passion and commitment our associates show in mastering next-gen capabilities gives us the confidence to innovate responsibly and deliver sustainable value as AI reshapes the services landscape,” said Kunnumal.

5. Dividend

TCS declared a third interim dividend of ₹11 and a special dividend of ₹46 per equity share. The record date for the purpose is January 17, and the dividend payment date is February 3.