Tata Consultancy Services (TCS) share price is in focus today after a fresh legal twist in its long-running dispute in the United States. An Appeals Court in US has upheld the damages awarded against the company, bringing the case back into focus for investors once again.
US Appeals Court confirms damages but reopens part of the case
The United States Court of Appeals for the Fifth Circuit has delivered a mixed ruling in TCS’s dispute with Computer Sciences Corporation (CSC), which later merged into DXC Technology Company.
The court has confirmed the earlier damages award of $194.2 million, keeping the financial hit intact. The damages were first decided by the United States District Court for the Northern District of Texas. The appeals court has now reviewed that decision. It confirmed the damages but cancelled the permanent injunction.
Meanwhile, this injunction had earlier stopped the company from using certain materials which were linked to CSC. The court has asked the District Court to reassess the injunction based on new directions.
This means the ban is lifted for now, but the lower court will take another look.
TCS: How the damages add up
Earlier in June 2024, the Tata Group company TCS had disclosed that it was held responsible for a total of $194.2 million. This included –
- $56.15 million in compensatory damages
- $112.30 million in exemplary (punitive) damages
- $25.77 million in prejudgment interest up to June 13, 2024
Furthermore, the company had argued that the exemplary damages were too high. However, the appeals court did not agree and kept the entire amount unchanged.
Company’s response
TCS said it is reviewing the ruling and looking at all legal options. This could include further appeals or asking for a review in higher courts. The company also noted that it will make the necessary accounting provisions in its financial statements as per rules.
TCS Q2FY26
TCS in Q2FY26 posted revenue of Rs 65,799 crore, up 3.7% from the previous quarter and 0.8% in constant currency. Net profit came in at Rs 12,075 crore after accounting for one-off restructuring costs of Rs 1,135 crore. Without this impact, profit would have been Rs 12,904 crore, up 8.36% year-on-year. Operating margin improved to 25.2%, rising 70 basis points sequentially, and net margin stood at 19.6%.