Tata Consultancy Services (TCS) reported a 2.7 percent sequential decline in consolidated net profit for the quarter ended June 2026, as a one-time legal settlement impacted earnings despite steady operational performance and continued momentum in AI-led business.
According to the company’s audited consolidated financial results, net profit attributable to shareholders stood at Rs 13,349 crore, compared with Rs 13,718 crore in the January-March quarter. Revenue from operations, however, continued to grow and reached Rs 72,275 crore during the quarter.
Legal Settlement Weighs on Earnings
The decline in quarterly profit was largely due to an exceptional charge of Rs 668 crore related to the settlement of TCS’ long-running legal dispute with Computer Sciences Corporation (CSC) in the United States.
The company said the additional provision follows the US Supreme Court’s decision in June to reject its petition for review, requiring TCS to recognise exemplary damages and related legal costs awarded to CSC.
Excluding the one-time charge, the company’s core operations remained stable. Profit before exceptional items and tax increased to Rs 18,612 crore, up from Rs 18,362 crore in the previous quarter.
Employee Costs Rise After Annual Salary Revision
TCS also implemented its annual salary hikes during the quarter, resulting in employee benefit expenses increasing to Rs 42,137 crore, compared with Rs 40,143 crore in the preceding quarter.
AI-Led Demand Continues to Drive Business
Commenting on the results, TCS Chief Executive Officer and Managing Director K Krithivasan said the company maintained its growth momentum despite geopolitical uncertainties and a challenging global macroeconomic environment.
He said TCS secured a USD 9.5 billion order book during the quarter, including a major AI-driven transformation contract with SKF.
According to Krithivasan, the company’s AI business has now reached an annualised revenue run rate of USD 2.6 billion, supported by rising customer investments in artificial intelligence, cloud modernisation, cybersecurity and sovereign cloud infrastructure.
AI Partnerships and Large Deal Wins
President and Chief Operating Officer Aarthi Subramanian said TCS continued to win several AI-led transformation projects during the quarter.
She noted that the company’s strategy around AI-powered IT operations, software engineering, application modernisation and business process transformation is gaining traction among global enterprises.
During the quarter, TCS also expanded its artificial intelligence ecosystem through strategic partnerships with Anthropic and Mistral. Among the major business wins announced during the period were:
- A USD 800 million AI-led business transformation deal with SKF
- A multi-million-dollar strategic partnership with ServiceNow
- A multi-million-dollar engagement with a Europe-based Fortune Global 50 company
- Several AI-focused contracts across the utilities, healthcare, retail and manufacturing sectors
BFSI Leads Growth
Banking, Financial Services and Insurance (BFSI), TCS’ largest business segment, recorded sequential revenue growth during the quarter.
Revenue from the segment increased to Rs 27,990 crore, compared with Rs 27,021 crore in the previous quarter.
The Communication, Media and Technology, Manufacturing, and “Others” segments also reported sequential growth, while the Consumer Business segment registered a decline.
Interim Dividend Announced
The company’s Board of Directors declared an interim dividend of Rs 12 per equity share for shareholders.
