How did TCS and HCL Technologies perform in Q3 2025?

Both TCS and HCL Technologies exceeded revenue expectations for the October-December 2025 quarter, reporting $7.51 billion and $3.79 billion respectively.

What are the new wage norms affecting Indian IT firms?

New government labor codes mandate basic pay to be at least 50% of total compensation, increasing statutory payouts like provident fund and gratuity for companies like TCS and HCLTech.

What is the impact of AI on TCS and HCLTech?

Both TCS and HCLTech are actively reporting AI revenue, with TCS reaching $1.8 billion in annualized revenue and HCLTech generating $146 million in the latest quarter.

Home / Business and Economy / IT Giants Beat Revenue Estimates Amidst Cost Pressures

IT Giants Beat Revenue Estimates Amidst Cost Pressures

13 Jan

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Summary

TCS and HCLTech exceeded revenue expectations in Q3
New wage regulations caused significant additional costs
Demand remains robust, but global market uncertainty persists

IT Giants Beat Revenue Estimates Amidst Cost Pressures

India's prominent IT services companies, Tata Consultancy Services (TCS) and HCL Technologies, have initiated the earnings season with revenues surpassing analyst projections for the October-December quarter. TCS reported $7.51 billion in revenue, while HCLTech announced $3.79 billion, exceeding expectations. A significant portion of TCS's growth stemmed from European clients, whereas HCLTech saw substantial gains from software product sales.

Despite the positive revenue figures, profitability faced pressure due to new government labor codes mandating that basic pay constitute at least 50% of total compensation. This resulted in increased statutory payouts, leading to approximately $350 million in additional costs for TCS and HCLTech combined during the quarter. This financial strain impacted operating margins, although both companies reported progress in AI-related revenue streams.