TCS Navigates New Labour Codes Amid Earnings and Revenue Growth

TCS reported a 13.91% drop in Q4 profit due to new labor codes, despite a 4.86% increase in revenue. The company saw a decline in headcount by 11,151 amid restructuring. AI revenue growth and international expansion are key focus areas for the future, with decision-making cycles shortening.

India's largest IT services exporter, TCS, has reported a profit decline of 13.91% for the December quarter, attributing much of the loss to the impact of new labor codes. Profit fell to Rs 10,657 crore, largely due to a 'statutory impact' amounting to Rs 2,128 crore from these codes.

Despite the profit drop, TCS saw an increase in overall revenue by 4.86%, reaching Rs 67,087 crore. CEO K Krithivasan pointed out that artificial intelligence and related data revenues have significantly contributed to the topline growth. The company aims for higher international revenue growth in the fiscal year 2026 compared to 2025.

TCS announced a reduction in its workforce by 11,151 during the quarter, part of its restructuring efforts aimed at efficiency. Amid these changes, TCS's efforts toward AI and productivity improvements have cushioned operational margins. The company's board has recommended a dividend of Rs 57 per share, including a special dividend of Rs 46.

(With inputs from agencies.)