TCS faces $194 mn after US appeals court upholds damages

Tata Consultancy Services (TCS) is staring at a major financial blow after a US Court of Appeals upheld a District Court ruling ordering the Indian IT major to pay $194 million in damages linked to a long-running trade secrets dispute.

In an exchange filing on 22 November 2025, TCS termed it an “Adverse Ruling” and said it is exploring “various options, including review and appeal before appropriate courts”, while reaffirming its intent to “Vigorously Defend” its position.

The company added that appropriate accounting provisions will be made in its financial statements as required by applicable accounting standards.

The Trade-Secrets Case: TCS vs CSC/DXC

The alleged misconduct centered on the misappropriation of proprietary information concerning insurance platforms such as Vantage-One and CyberLife belonging to Computer Sciences Corp., now part of DXC Technology.

CSC alleged that former Transamerica employees who joined TCS enabled improper and unauthorised access to its licensed software, information that allegedly contributed to improvements in TCS’s flagship BaNCS platform.

The controversy began around 2019, following the high-profile $2-billion, 10-year outsourcing deal between TCS and Transamerica in 2018. The deal was terminated in 2023 when Transamerica chose to bring the IT operations in-house.

A US District Court found TCS liable for misappropriation in June 2024, awarding damages amounting to approximately $194 million. The Appeals Court has now upheld this amount but has vacated the earlier injunction that restricted TCS from using certain materials, sending that portion back for reassessment.

Financial Impact on TCS

TCS confirmed it will make provisions for the $194 million penalty, which will directly hit profitability in the quarter when recorded. The payout—treated as an expense—will weigh on the company’s net profit and margins.

For context, in Q2 FY26 -July-September 2025-, TCS reported:

• Net profit: ₹12,075 crore (~$1.3 billion)
• Revenue: ₹65,799 crore (~$7.3 billion)
• BIT margin: 25.2%

Although the lifted injunction removes the immediate threat to its BaNCS-related business operations in the US, the sustained litigation and financial burden mark one of the most significant legal setbacks for India’s largest IT services firm.

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