New Labour Code Hits Top IT Firms with ₹5,000 Crore One-Time Expense

• Five major Indian IT companies incurred a combined ₹5,000 crore additional expense in Q3FY26 due to new labour codes.
• The new codes mandate revisions to wage definitions, increasing basic pay and linked statutory contributions like gratuity and provident fund.
• TCS reported the highest one-time charge of ₹2,128 crore, followed by Infosys (₹1,289 crore) and HCL Technologies (₹956 crore).
• Wipro and Tech Mahindra also faced charges of ₹303 crore and ₹272 crore, respectively, impacting their net profits.
• While the impact is largely one-off, a recurring effect of 10-15 basis points on margins is expected, primarily from gratuity and leave liability.

Why It Matters: New labour codes led to a significant one-time financial hit for top IT firms, impacting Q3FY26 profits.