TCS Q3 Results FY26: Net Profit at ₹10,720 Crore; Revenue at ₹67,087 Crore
Tata Consultancy Services (TCS) reported its Q3 FY26 results with steady revenue growth and strong dividend payouts, although profit declined due to exceptional items related to restructuring, labour code impact, and legal provisions. The company continues to see stable demand across core verticals, with BFSI remaining the largest revenue contributor.
Quarter: Q3 FY26
Revenue: ₹67,087 crore
Net Profit: ₹10,720 crore
EPS: ₹29.45
Dividend: ₹11 interim + ₹46 special
Table of Contents
- Key Highlights
- Financial Performance
- Exceptional Items Impact
- Segment Performance
- Operational Drivers
- Capital Allocation and Dividends
- Valuation Context
- Risks to Outlook
- Capital-Flow Impact
- Outlook
Key Highlights
- Revenue at ₹67,087 crore in Q3 FY26
- Net profit at ₹10,720 crore
- EPS at ₹29.45 for the quarter
- Third interim dividend of ₹11 per share
- Special dividend of ₹46 per share declared
- BFSI remains the largest vertical contributor
TCS Q3 Results FY26: Financial Performance
| Metric | Q3 FY26 | Q3 FY25 | Change |
|---|---|---|---|
| Revenue | ₹67,087 crore | ₹63,973 crore | +4.9% |
| Net Profit | ₹10,720 crore | ₹12,444 crore | -13.8% |
| EPS | ₹29.45 | ₹34.21 | -13.9% |
The company reported steady revenue growth on a year-on-year basis, while profit declined due to exceptional charges during the quarter.
TCS Q3 Results FY26: Exceptional Items Impact
TCS reported several exceptional expenses during the quarter that affected profitability:
- Restructuring expenses
- Statutory impact of new labour codes
- Provision towards legal claim
These items reduced the reported profit before tax for the quarter to ₹14,078 crore.
TCS Q3 Results FY26: Segment Performance
| Segment | Revenue (₹ crore) |
|---|---|
| BFSI | 25,889 |
| Consumer Business | 10,581 |
| Communication, Media & Technology | 9,902 |
| Life Sciences & Healthcare | 7,068 |
| Manufacturing | 6,580 |
| Others | 7,067 |
BFSI remained the largest vertical, contributing ₹25,889 crore in revenue during the quarter.
Operational Drivers
BFSI Demand Stability
The BFSI vertical continued to be the primary growth driver, supported by digital transformation and cost-optimization programs across global banks.
Consumer and Healthcare Growth
Consumer business and life sciences segments also showed steady performance, reflecting resilient enterprise tech spending.
Pressure in Communication & Technology
The communication, media, and technology segment reported relatively lower growth, reflecting cautious tech spending in some global markets.
Capital Allocation and Dividends
The board declared:
- Third interim dividend: ₹11 per share
- Special dividend: ₹46 per share
The total dividend for the quarter stood at ₹57 per share, highlighting the company’s strong cash-generation profile.
Valuation Context
TCS is typically valued as a large-cap defensive IT stock, with premium multiples supported by:
- Stable cash flows
- High return ratios
- Consistent dividend payouts
- Global client base
Profit volatility from exceptional items may influence short-term sentiment, but long-term valuation depends primarily on revenue growth and deal wins.
Risks to Outlook
- Global IT spending slowdown
- Currency fluctuations
- Client budget cuts in technology verticals
- Legal and regulatory expenses
Capital-Flow Impact
TCS remains a core institutional holding in the IT sector due to:
- Consistent dividends
- Large deal pipeline
- High cash generation
- Defensive characteristics during economic uncertainty
However, profit compression due to exceptional items may lead to short-term valuation adjustments.
TCS Q3 Results FY26: Industry and Demand Environment
The global IT services environment remained mixed during the quarter, with clients across banking, manufacturing, and consumer sectors continuing to prioritize cost optimization and vendor consolidation. While discretionary technology spending has shown signs of caution in certain geographies, large enterprises continue to invest in digital transformation, cloud migration, and automation projects.
TCS continues to benefit from its diversified client base across industries and geographies. The company’s scale, long-term contracts, and strong relationships with global banks and Fortune 500 clients provide revenue visibility even during periods of macroeconomic uncertainty.
Deal Pipeline and Client Spending Trends
Enterprise clients are increasingly focusing on productivity-led investments rather than aggressive expansion programs. This has resulted in:
Higher demand for cost optimization and efficiency projects
Cloud migration and modernization deals
Automation and AI-led transformation programs
Vendor consolidation strategies among large clients
These trends support stable revenue growth for large IT services companies, even as discretionary technology spending cycles remain uneven.
Margin and Cost Structure Dynamics
Margins across the IT services industry are influenced by factors such as wage inflation, currency movements, utilization rates, and the mix between on-site and offshore delivery. For large players like TCS, strong scale advantages and operational efficiency typically support stable margins over the long term.
However, exceptional items, restructuring costs, or legal provisions can temporarily impact reported profitability, as seen during the quarter.
Outlook
The company’s near-term outlook will depend on:
- Global enterprise IT budgets
- Recovery in technology sector spending
- Execution of large digital transformation deals
With stable revenue growth and strong dividends, TCS remains a key anchor stock in the IT sector.
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