Tata Consultancy Services (TCS) and HCL Technologies began India’s IT earnings season with revenue that exceeded analyst estimates for the October–December quarter (Q3 FY26). Even so, new labour code provisions increased costs and kept the focus on profitability and demand.
Early trading reflected that caution on Tuesday, January 13. TCS fell 0.69% to ₹3,217.40, while HCLTech dropped 1.22% to ₹1,647.30 on the NSE. The Nifty IT index slipped 0.08% to 37,958.80.
TCS reported $7.51 billion in quarterly revenue, down 0.4% year-on-year and up 0.6% sequentially. In rupee terms, revenue from operations rose 4.86% to ₹67,087 crore. Management linked growth to artificial intelligence and data-led programmes, while deal activity remained a key support.
HCLTech also posted stronger top-line growth. Revenue from operations increased 13.3% year-on-year to ₹33,872 crore, with a 6% rise quarter-on-quarter. The company highlighted engineering and R&D services growth, while Advanced AI revenue rose 19.9% sequentially to $146 million.
TCS reported a 13.91% decline in quarterly profit to ₹10,657 crore, citing a one-time statutory impact from new labour codes of ₹2,128 crore. Excluding that impact, TCS said profit would have risen 8.5% to ₹13,438 crore. The company also flagged a small ongoing margin impact from labour code changes.
Workforce trends also stayed in focus. TCS said headcount fell by 11,151 during the quarter to 5,82,163. Company executives referenced restructuring-linked exits and productivity gains, including AI-driven improvements, as firms recalibrate capacity and delivery models.
TCS reported a total contract value of $9.3 billion for the quarter. It also said AI revenues grew 17% quarter-on-quarter to an annualised run rate of $1.8 billion. Operating margin held at 25.2%, with productivity and currency benefits offsetting wage and brand-building costs.
HCLTech reported consolidated net profit of ₹4,076 crore, down 11.2% year-on-year. The company cited a one-time $82 million (₹719 crore) impact from labour code provisions, and it said profit would have reached ₹4,795 crore without that charge.
HCLTech raised FY26 constant currency revenue growth guidance to 4.0%–4.5% and services growth guidance to 4.75%–5.25%, while it maintained EBIT margin guidance of 17%–18% excluding the one-time impact. Net new bookings reached $3 billion, up 43.5% year-on-year, and the company disclosed a $473 million deal with a global apparel retailer to deliver AI-led technology services.