Tata Consultancy Services (TCS), India's leading IT services giant, has announced its financial results for the third quarter of the fiscal year 2026, revealing a significant impact from recent regulatory changes alongside strong growth in its artificial intelligence portfolio.
Profit Impacted by New Labour Regulations
The company reported a 14% year-on-year decline in its consolidated net profit for the quarter ending December 2025. This drop is primarily attributed to the financial impact of implementing the new labour codes in India. The regulatory shift has led to increased operational costs, affecting the bottom line for the quarter.
Artificial Intelligence Business Soars
In a bright spot for the tech behemoth, its artificial intelligence business segment showcased remarkable performance. Revenue generated from AI-related projects and services climbed to $1.8 billion. This surge underscores the accelerating global demand for AI solutions and TCS's strong positioning in this high-growth market.
Sector-Wise Performance Highlights
Despite the overall profit pressure, key industry verticals demonstrated resilience and growth. The Banking, Financial Services, and Insurance (BFSI) sector, a traditional stronghold for TCS, witnessed a 1.6% year-on-year growth in the third quarter.
Furthermore, the life sciences and healthcare industry vertical posted an even stronger performance, registering a 2.2% year-on-year increase. This growth highlights the sustained demand for digital transformation in the healthcare sector post-pandemic.
The results, announced on 12 January 2026, present a mixed picture for TCS. While navigating the cost pressures from domestic policy changes, the company is successfully capitalizing on the global technology trend towards artificial intelligence. The performance of core sectors like BFSI and healthcare indicates stable demand for its core IT services, providing a balanced foundation for future quarters.
