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TCS reported a Rs 2,128 crore impact from new Indian Labour Codes in Q3 FY2026
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The Labour Codes caused nearly a 20% hit on TCS's Q3 net profit of Rs 10,657 crore
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India's four Labour Codes unified 29 old laws to improve business ease and worker welfare
Tata Consultancy Services Ltd. has reported a Rs 2,128 crore impact in the December quarter of the financial year ending March 2026, due to the newly-introduced Indian Labour Codes, the company confirmed in an exchange filing.
This is in line with a Jefferies estimate, which claimed the new Labour Codes will have a minimum 10-20% hit on the net profit of Indian IT companies.
A Rs 2,128-crore hit taken from statutory Labour Codes, therefore, accounts for an impact of nearly 20% of TCS' Q3 profit, which stood at Rs 10,657 crore.
What Is Indian Labour Codes?
In November 2025, the Government of India officially notified the implementation of four unified Labour Codes, consolidating 29 complex, colonial-era laws into a streamlined framework.
This reform aimed to balance "Ease of Doing Business" with enhanced worker welfare.
A Jefferies note in December had noted that the Labour Codes will impact recurring employee costs. Gross recurring impact may take up employee costs by up to 5%.
The brokerage firm predicted that IT firms may limit this impact be lowering wage hikes at senior levels.
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