Litigation Update
TCS to Take Additional USD 70 Million Charge After U.S. Supreme Court Declines Review in DXC Litigation
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Tata Consultancy Services (TCS) disclosed that the United States Supreme Court has denied its petition seeking review of the Fifth Circuit Court judgment in the long-running litigation involving Computer Sciences Corporation (CSC), now DXC Technology Company. Following the decision, TCS will recognize an additional USD 70 million provision in Q1 FY2027, taking the total provision related to the matter to USD 220 million.
PRICE-SENSITIVE TRIGGER
Event: United States Supreme Court denied TCS’s petition for a writ of certiorari seeking review of the Fifth Circuit Court judgment in the CSC/DXC litigation matter.
Type: Litigation Update
Impact: Negative
Immediate Effect:Â TCS will record an additional USD 70 million one-time exceptional expense in Q1 FY2027 towards damages, interest, and legal costs.
Key Metrics:
- Revenue: Not disclosed in the filing
- EBITDA: Not disclosed in the filing
- PAT: Expected impact from additional USD 70 million exceptional charge in Q1 FY2027
- Margins: Not disclosed in the filing
- QoQ Movement: Not disclosed in the filing
- YoY Movement: Not disclosed in the filing
- Segment Performance: Not disclosed in the filing
- Existing Provision: USD 150 million
- Additional Provision: USD 70 million
- Total Provision: USD 220 million
Highlight:
- Total Litigation Provision: USD 220 million
What Happened ?
TCS informed stock exchanges that the U.S. Supreme Court denied its petition to review the judgment issued by the United States Court of Appeals for the Fifth Circuit in the litigation involving Computer Sciences Corporation, now DXC Technology Company. The decision effectively concludes TCS’s appeal efforts before the highest court in the United States. As a result, the company will recognize an incremental provision of USD 70 million in Q1 FY2027.
Key Details
Litigation Outcome and Accounting Impact:
- The Supreme Court denied TCS’s petition for a writ of certiorari on June 15, 2026.
- The matter relates to litigation involving Computer Sciences Corporation (CSC), now DXC Technology Company.
- TCS had previously disclosed developments in the case during June 2024 and November 2025.
- The company had already provided USD 150 million in its books under applicable accounting standards.
- An additional USD 70 million provision will now be recorded.
- The charge relates to damages, interest, and legal costs.
- The incremental provision will be recognized as a one-time exceptional expense in Q1 FY2027.
Note:
- The disclosure primarily impacts reported profitability through an exceptional charge and does not indicate any disruption to ongoing business operations.
Risk Analysis
Summary:
- The legal matter has reached an advanced stage with the Supreme Court declining to hear the appeal. While the development increases the financial impact on TCS, it also provides greater clarity regarding the company’s remaining exposure.
Key Risks:
- Additional USD 70 million exceptional expense will affect Q1 FY2027 earnings.
- Litigation-related costs increase total provisions to USD 220 million.
- Near-term profitability may be impacted by the one-time charge.
- No operational or client delivery risks were disclosed.
Worst Case Scenario:
- The full financial impact of the litigation is reflected through the enhanced provisioning, resulting in lower reported earnings for the affected quarter.
Risk Level: Medium
Company Commentary
- The United States Supreme Court denied TCS’s petition for review of the Fifth Circuit Court judgment on June 15, 2026.
- The company has already provided USD 150 million in relation to the matter.
- TCS will make an additional provision of USD 70 million towards damages, interest, and legal costs.
- The incremental amount will be recognized as a one-time exceptional expense in Q1 FY2027.
- The disclosure has been made under Regulation 30 of the SEBI Listing Obligations and Disclosure Requirements Regulations, 2015.
Official Exchange Filing: Tata Consultancy Services Limited
