IT services giant Tech Mahindra has reported Rs 272.4 crores in exceptional charges in its December quarter earnings on the account of the statutory impact of new labour codes. The adjustments for labour codes include an increase in gratuity liability arising out of past service cost and an increase in leave liability.
Speaking at the company’s Q3 earnings conference on January 16, Rohit Anand, CFO, Tech Mahindra said, “We've taken the one-time impact of the new labour code. There will be ongoing impact of margins, that will be anywhere in the range of 10 to 20 basis points as we move forward.” “As we work on our margins, we will make sure that we incorporate that to offset the premium the labour code,” he added.
Tata Consultancy Services (TCS) on January 12 reported Rs 2,128 crore and HCLTech Rs 956-crore exceptional charge on account of new labour codes. Infosys too had reported Rs 1,289 crore in exceptional charge on January 14. Wipro lost Rs 302.8 crores in exceptional charge.
This takes the overall costs of implementing new labour codes to over Rs 4,947.8 crore for the top five IT services majors.
Tech Mahindra Q3 results
Tech Mahindra on January 16 reported a 14.1 percent year-on-year rise in consolidated net profit at Rs 1,122 crore for the quarter ended December 31, 2025, aided by strong margin expansion. Revenue from operations rose 8.3 percent to Rs 14,393 crore in Q3 FY26, compared with Rs 13,286 crore a year ago. Operating performance improved sharply, with EBIT climbing 40.1 percent year-on-year to Rs 1,892 crore, while the EBIT margin expanded to 13.1 percent.
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