After TCS, Infosys sees one-time hit from new labour codes in Q3

New Delhi, Jan 14 (PTI) After Tata Consultancy Services (TCS) flagged a sharp statutory impact from the implementation of India's new labour codes, Infosys on Wednesday reported a one-time exceptional charge of Rs 1,289 crore for the December quarter.

Earlier this week, TCS said the rollout of the new labour codes in Q3FY26 resulted in a statutory impact of Rs 2,128 crore. HCLTech also disclosed a one-time provision of USD 82 million (about Rs 719 crore) linked to the implementation.

The disclosures - reflecting on the Q3 earnings - highlight industry-wide adjustments by large IT services firms to account for changes in employee benefits and statutory obligations following the introduction of the new labour regulations.

For Infosys, which reported a 2.2 per cent dip in consolidated net profit to Rs 6,654 crore in the December quarter, it has raised its full-year revenue guidance, though a significant highlight of the Q3 FY26 results was the impact of the government's notification regarding the Labour Codes on November 21, 2025.

These codes - that consolidate 29 labour laws into a unified framework governing employee benefits during employment and post-employment, and introduce changes, including a uniform definition of wages and enhanced benefits relating to leave - led to a substantial increase in the company's employee-related liabilities.

"The adjustments for Labour Codes represent an increase in gratuity liability arising out of past service cost and an increase in leave liability, together by USD 143 million (Rs 1,289 crore), which is recognised in the consolidated statement of comprehensive income," Infosys said in a regulatory filing.

India's largest IT services exporter TCS Monday reported a 13.9 per cent drop in December quarter profit at Rs 10,657 crore, primarily on a one-time impact of new labour codes.

Implementation of the new labour codes during the quarter led to a "statutory impact" of Rs 2,128 crore, TCS said, adding that but for all the one-time impact, its profit would have grown 8.5 per cent to Rs 13,438 crore. PTI ANK MBI ANZ DRR