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TCS, HCLTech Report Q3 Profit Declines on One-Off Charges as Revenue Grows and Payouts Announced

One-off labour plus legal provisions overshadow operational gains, shifting attention to AI traction, FY26 outlook.

Overview

  • TCS net profit fell about 14% year-on-year to Rs 10,657 crore as exceptional items of roughly Rs 3,391 crore included a Rs 2,128 crore labour-code provision, a ~Rs 1,010 crore legal provision and restructuring costs.
  • TCS reported revenue growth of roughly 5% to Rs 67,087 crore with operating margin stable at 25.2%, total contract value of $9.3 billion and a total dividend of Rs 57 per share including a special payout.
  • HCLTech posted net profit of about Rs 4,082 crore, down year-on-year and sequentially, after a one-time Rs 956 crore charge from India’s new labour codes, while revenue rose 13% to Rs 33,872 crore and EBIT margin reached 18.6% including an 81 bps restructuring impact.
  • HCLTech maintained FY26 guidance at 4%–4.5% constant-currency revenue growth with services at 4.75%–5.25% and EBIT margin at 17%–18% excluding the one-off, and declared a Rs 12 per-share interim dividend.
  • AI and deal momentum accelerated, with TCS citing $1.8 billion annualized AI services revenue and HCLTech reporting advanced AI revenue of $146 million for the quarter and new deal wins totaling about $3.0 billion.