Tata Consultancy Services (TCS) is set to announce its Q3 FY26 results on Monday, January 12, 2026, and analysts anticipate a rise in net profit, potentially reaching 5.6% year-on-year (YoY). Investors and analysts are focusing on deal wins, the BSNL project's impact, and the company's AI strategy.
Financial Performance Expectations
TCS is expected to demonstrate sequential growth in revenue and profitability for the December quarter. Bloomberg estimates suggest a 2% sequential rise in revenue, potentially reaching ₹66,849 crore. Operating profit and net profit are also projected to increase by 8%. However, revenue growth in constant currency terms is expected to decline by 2.18%, highlighting pressure on underlying growth momentum.
Some analysts are forecasting slightly different figures. Univest projects TCS's revenue to be in the range of ₹62,000 crore to ₹63,500 crore, an 8% YoY increase. They also anticipate a 7% YoY rise in Profit After Tax (PAT) and a 27% YoY increase in EBITDA. Net profit is estimated at ₹12,200 crore, up by 5% YoY. Another report mentions analysts expect TCS to report a 4-6% YoY rise in net profit for the quarter on a similar growth in revenue.
Deal Wins and Key Focus Areas
Deal wins are expected to be in the range of ₹7.00 billion to ₹9.00 billion. Kotak Institutional Equities anticipates deal wins in the range of $10-11 billion for the quarter. Analysts will be closely monitoring several key areas, including BFSI demand trends, performance in North America and Europe, and calendar year 2026 budgets. The impact of restructuring on margins and the progress of artificial intelligence adoption are also key focus areas.
BSNL Project Impact
The ramp-down of the BSNL project continues to be a significant factor influencing TCS's growth. While the BSNL deal has been instrumental in driving TCS's growth in the Indian market, its revenue impact is expected to taper off. UBS notes that growth continues to be impacted by the BSNL ramp-down, while Nuvama highlights that execution on the BSNL extension deal has not yet started. TCS is actively seeking new opportunities to compensate for the revenue gap from this contract.
AI Strategy in Focus
TCS's AI strategy will be a major highlight, with AI-led services already generating $1.5 billion annually. The company has been highlighting its AI capabilities, reporting over 5,000 AI engagements. TCS disclosed key performance metrics for the first time, announcing $1.5 billion in annualized revenue from AI as of September. Management stated that its AI business is growing faster than the overall company. TCS is also planning a significant investment of $6.5 billion over five to seven years in sovereign AI data centers in India.
Margins and Other Factors
EBIT margins are expected to expand significantly despite cost pressures from wage increases. Bloomberg estimates EBIT margin to expand to 25.02% versus 23.45%. However, the quarter may see EBIT margins for TCS decline sequentially, driven by a two-month impact of wage hikes and the continuation of redundancy costs, analysts said. Attrition is projected at 7.60% over the past 12 months, with total headcount expected to reach 597,093. An exceptional item related to severance pay of ₹800.00 crore is anticipated.
Strategic Initiatives
TCS has launched a strategic transformation with its largest acquisition since its IPO—the $700 million Coastal Cloud deal—and a $6.5 billion data center investment over six years. The company is also focusing on digital transformation, AI-led solutions, and core verticals like BFSI and healthcare to drive sustainable growth and maintain operational efficiency.
