TCS Q3 Revenue Surges Past Estimates on AI Demand
Overview
Tata Consultancy Services posted a stronger-than-expected third-quarter revenue of ₹67,087 crore, a 4.9% increase, driven by robust artificial intelligence-led demand. Despite AI services contributing $1.8 billion annually, net profit saw a 14% dip to ₹10,657 crore due to restructuring costs. The company secured eight deals in the quarter, maintaining its lead among Indian IT firms.
TCS Posts Strong Q3 Revenue Beat Fueled by AI Growth
Tata Consultancy Services (TCS) reported third-quarter revenue figures on Monday that surpassed analyst expectations, signaling robust demand for its services, particularly in artificial intelligence. The company's consolidated revenue climbed 4.9% year-on-year to ₹67,087 crore for the quarter ending December 31. This result edged past the LSEG consensus estimate of ₹66,676 crore.
AI Demand Drives Performance
The growth was significantly propelled by artificial intelligence initiatives from clients. This surge in AI-led tech spending occurred even during a period typically characterized by scaled-down operations due to the year-end holidays. TCS highlighted that its AI business now generates $1.8 billion in annualized revenue, representing approximately 5% of its total annual turnover.
Profit Dip Linked to Restructuring
Despite the revenue success, TCS's net profit declined by 14% to ₹10,657 crore. The Mumbai-based IT giant attributed this decrease to restructuring costs, including those associated with layoffs announced in 2025. This profit figure fell short of the ₹13,024 crore anticipated by analysts.
Order Book and Deal Wins
The total order book for the quarter stood at $9.3 billion, a decrease from the $10 billion recorded in the previous quarter and the $10.2 billion from the year prior. Nevertheless, TCS secured eight new deals during the reporting period, more than any of its top Indian IT competitors. Notable client wins included agreements with British retailer Morrisons and Danish telecom operator Telenor.
TCS, as the first major Indian IT firm to release its quarterly results, sets the tone for the sector's earnings season. HCLTech is scheduled to announce its figures later today. Shares of TCS closed 1.3% higher in pre-earnings trading.
