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IT cos’ Q3 profits take hit due to new labour codes
January 13, 2026
|The Morning Standard
Incremental impact arises due to a change in wage definition • Cos report rise in exceptional costs, restructuring expenses • Al-led projects drive revenue growth
EVEN as artificial intelligence-led deal wins supported revenue growth for India’s top IT firms in the December quarter, profits have taken a hit due to the implementation of new labour codes.
Tata Consultancy Services (TCS), India’s largest IT services firm, took a ₹2,128 crore hit to its profit during the quarter as employee-cost rose due to the new labour codes. This included ₹1,816 crore for additional gratuity costs and ₹312 crore for long-term compensated absences after India’s new labour codes came into effect on November 21. “The incremental impact primarily arises due to a change in wage definition,” the company said.
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