Tata Consultancy Services reported revenue from operations of ₹67,087 crore in Q3 FY26, compared with ₹63,973 crore in the same quarter last year. This showed that the company continued to grow even when global technology spending stayed cautious. In dollar terms, revenue stood at $7,509 million. The company delivered 0.6 percent quarter-on-quarter growth and 0.8 percent sequential growth in constant currency.
These numbers showed that clients continued to spend, but they moved carefully and took more time to approve big projects. Large enterprises focused more on cost control and efficiency rather than aggressive digital expansion. Even with this environment, TCS managed to protect its revenue momentum, which many investors see as a sign of stability. Growth did not look fast, but it looked reliable and predictable, which matters in uncertain times.
Profit numbers attracted attention in this quarter. Profit attributable to shareholders came in at ₹10,657 crore, down from ₹12,380 crore in Q3 FY25. This decline did not come from weak demand or execution issues. The company booked several exceptional items during the quarter that pulled down reported profit.
TCS recorded a ₹2,128 crore impact due to newly notified labour codes in India. The company also created a provision of ₹1,010 crore related to a legal claim in the United States. In addition, it spent ₹253 crore on restructuring activities. These items together reduced the bottom line sharply.
Despite this, operating margin stayed stable at 25.2 percent on a sequential basis. This showed that core operations remained strong. The company controlled costs well and protected profitability at the operating level. Investors therefore looked beyond the headline profit decline and focused more on the quality of earnings, which stayed healthy.
Deal wins form an important forward-looking indicator for IT services companies. In Q3, TCS reported a total contract value of $9.3 billion. This number remained solid, but it stayed lower compared with the same period last year. It also came in lower than the immediately previous quarter.
The company closed eight deals during the quarter, including contracts with Morrisons and Telenor. These wins showed that clients continued to trust TCS for large and complex programs. However, the lower total value reflected client caution, especially around large transformation deals that involve higher spending commitments.
The deal pipeline did not collapse, but it did not accelerate either. Many enterprises preferred smaller or phased contracts. Investors usually track this trend over several quarters because deal values can move up and down sharply in a single quarter.
Artificial intelligence remained a major focus area during the quarter. TCS disclosed annualized AI services revenue of $1.8 billion. This marked an important milestone because AI moved from an experimental offering to a measurable revenue stream. The company also highlighted strong sequential growth in this segment.
During the quarter, TCS strengthened its AI ecosystem through multiple initiatives. It partnered with TPG to support the expansion of HyperVault, which focuses on AI-ready data center infrastructure at a large scale. The company also signed a definitive agreement to acquire Coastal Cloud, which added strength to its Salesforce services portfolio.
TCS also expanded collaboration with Google Cloud and adopted Gemini Enterprise for building agentic AI solutions. These moves showed that the company aimed to cover the full AI stack, from infrastructure to applications. This approach increased the chances of sustained AI-led growth over the medium term.
TCS announced a dividend of ₹57 per share during the quarter. This included a special dividend of ₹46 per share. The company fixed January 17, 2026 as the record date and February 3, 2026 as the payment date. This announcement reinforced TCS’s reputation as a strong dividend-paying company.
The company also reported cash flow from operations at 130.4 percent of net income. This high cash conversion ratio showed that earnings translated well into actual cash. Strong cash generation gives the company flexibility to invest, acquire, and return money to shareholders even when growth slows.
For long-term investors, this combination of dividends and cash strength often provides downside protection during volatile market phases.
Q3 FY26 results showed a mixed but stable picture. Revenue growth continued at a modest pace, margins stayed firm, and cash flows remained strong. Profit declined mainly due to clearly defined one-time costs rather than business weakness. Deal wins softened compared to last year, but they still indicated steady demand.
The rising contribution from AI services stood out as a key positive trend. With AI revenue now touching $1.8 billion on an annualized basis, the company showed that it can monetize emerging technologies at scale. Dividend payouts and strong cash conversion added comfort for investors looking for stability and income.
Overall, the quarter did not deliver big surprises. It confirmed TCS’s position as a steady performer in a challenging global environment, though growth acceleration may take more time than earlier cycles.