Tata Consultancy Services (TCS), India's premier IT services exporter, unveiled a robust financial performance for the third quarter of the fiscal year 2025-26 (Q3 FY26). The company reported a steady growth in revenue and announced a significant interim dividend for its shareholders, reflecting strong operational health and cash generation.
Financial Performance: Revenue and Profitability
The company's revenue from operations for the quarter stood at Rs 67,087 crore. This marks a healthy 5% increase compared to the Rs 63,973 crore reported in the same period last year (Q3 FY25). On a sequential basis, the growth was 2.0% over the previous quarter (Q2 FY26). In constant currency terms, the quarter-on-quarter growth was 0.8%.
TCS demonstrated resilient profitability metrics. The operating margin remained stable sequentially at 25.2%. Notably, the net margin saw an improvement, rising by 40 basis points to reach 20.0%. A key highlight was the exceptional cash flow, with cash from operations standing at a robust 130.4% of net income for the quarter.
Shareholder Reward and Growth Drivers
In a move that will delight investors, the TCS board declared an interim dividend of Rs 57 per equity share for FY26. This payout comprises a third interim dividend of Rs 11 per share and a special dividend of Rs 46 per share. The company has fixed January 17, 2026 as the record date to determine eligible shareholders, with the payment scheduled for February 3, 2026.
The company's growth was powered by strong deal wins and a remarkable surge in its artificial intelligence (AI) offerings. The total contract value (TCV) for the quarter was a solid $9.3 billion. Furthermore, TCS's annualised revenue from AI services skyrocketed to $1.8 billion, registering an impressive 17.3% quarter-on-quarter growth in constant currency terms.
Leadership Commentary and Strategic Focus
Commenting on the quarterly results, TCS Chief Executive Officer and Managing Director, K Krithivasan, stated that the company sustained the growth momentum from the previous quarter. He emphasised TCS's ambitious vision in the AI domain.
"We remain steadfast in our ambition to become the world’s largest AI-led technology services company, guided by a comprehensive five-pillar strategy," Krithivasan said. He added, "Our AI services now generate USD 1.8 billion in annualised revenue, reflecting the significant value we provide to clients through targeted investments across the entire AI stack, from infrastructure to intelligence."
The results underscore TCS's ability to navigate a dynamic global market, leveraging its deep expertise in traditional IT services while capitalising on the high-growth artificial intelligence segment. The strong cash flow and generous dividend declaration signal confidence in the company's future earnings stability and commitment to returning value to its shareholders.
