TCS profit falls 14% as labour-code charge and legal provision weigh on results

Tata Consultancy Services reported a 14% year-on-year decline in net profit for the quarter ended December 31, 2025, after charges related to new labour codes, a legal claim and employee terminations weighed on its results. Net profit fell to ₹10,720 crore from ₹12,444 crore a year earlier, the company said. The reported impact included ₹2,128 crore linked to the labour codes, a ₹1,010 crore provision for a legal claim and ₹253 crore in termination expenses.

Revenue increased 5% year on year to ₹67,087 crore. TCS said it laid off 1,800 employees during the quarter and told analysts that the release of employees would continue in the following quarter. The company’s global headcount stood at 582,163 on December 31, while its 12-month attrition rate was 13.5%.

Operating margin remained stable sequentially at 25.2%, and net margin was 20%, an increase of 40 basis points from the previous quarter. TCS said annualised revenue from AI services reached $1.8 billion, rising 17.3% quarter on quarter in constant-currency terms. Chief executive K.

Krithivasan said the growth momentum seen in the second quarter continued and that the company remained focused on becoming an AI-led technology services provider. The banking, financial services and insurance segment grew 1.6% year on year, while consumer business declined 2.7%. Life sciences and healthcare, and energy, resources and utilities, each grew 2.2%.

Communications and media fell 1.6%, while regional markets and other businesses grew 19.4%. By geography, North America grew 1.3%, the United Kingdom declined 3.2% and India fell 34.3%. Asia Pacific increased 3.5%, continental Europe rose 1.4%, Latin America grew 1.4% and the Middle East and Africa increased 3.8%.

The board declared a ₹57-per-share dividend, including a ₹46 special dividend. The record date was set for January 17, 2026, with payment scheduled for February 3.