India's Tata Consultancy Services will record a one-time exceptional charge of $70 million following the US Supreme Court's decision to uphold a damages award in a trade secrets case brought by DXC Technology. The additional outlay, which includes damages, interest and legal fees, will be recognised in the first quarter of 2027. Combined with the $150 million TCS had previously reserved, the company's total financial exposure in the dispute now stands at $220 million.
The Supreme Court on June 15 let stand a $168 million damages award favouring DXC Technology, rejecting TCS's final appeal. A federal jury had initially recommended damages of $210 million in 2023, though the presiding judge subsequently reduced the figure. The 5th US Circuit Court of Appeals upheld this revised amount in 2025.
The dispute originated from a 2019 lawsuit filed in Dallas federal court by Computer Sciences Corporation, DXC's predecessor company. The case alleged that TCS recruited approximately 2,200 employees from Transamerica, an insurance firm, and leveraged their privileged access to develop a competing life-insurance system. A jury found TCS had willfully misappropriated trade secrets in the process.
The damages comprised $56 million in compensatory damages and $112 million in punitive damages, as determined by US District Judge Brantley Starr. TCS had challenged the decision before the Supreme Court, contending that unjust enrichment damages should not have been awarded without demonstration of actual losses and that the punitive component was disproportionate. DXC contended the lower court's ruling required no further judicial consideration.
The financial impact comes as TCS reported net profit of 137.18 billion rupees ($1.45 billion) for the fourth quarter. The company remains one of India's largest information technology services providers despite the substantial settlement obligation.
