TCS to take $70 million Q1 hit after US Supreme Court rejects appeal in DXC trade secrets case

Tata Consultancy Services (TCS) will take a one-time exceptional charge of $70 million in the first quarter of FY27 after the US Supreme Court declined to hear its appeal in a long-running trade secrets case involving DXC Technology.

The country’s largest IT services company disclosed the development in an exchange filing, saying the top US court had refused to review an earlier ruling by the United States Court of Appeals for the Fifth Circuit.

“The United States Supreme Court has denied our petition for a writ of certiorari to review the judgment of the United States Court of Appeals for the Fifth Circuit on June 15, 2026, in the above matter,” TCS said in the filing.

TCS said it had already made a provision of $150 million in connection with the case and would now account for the remaining liability.

“The Company has already provided USD150 million in relation to this matter in the books of accounts in accordance with applicable accounting standards and will make necessary provision now for the incremental amount of $70 million towards damages, interest and legal cost, as a one-time exceptional expense, in Q1 FY2027,” the company said.

The Supreme Court’s decision leaves in place a lower court ruling that upheld a $168 million award in favour of DXC Technology in a case involving alleged misappropriation of trade secrets related to life-insurance software.

In 2019, Computer Sciences Corporation, now part of DXC Technology, sued TCS and alleged that the IT firm hired around 2,200 employees from Transamerica and used their access to CSC’s software and proprietary information to build a rival life-insurance platform.

TCS has denied the allegations, arguing through the proceedings that the information in question was not confidential and that it had accessed the software lawfully.

In 2023, a jury found TCS liable for willful misappropriation of trade secrets and recommended damages of $210 million. US District Judge Brantley Starr later reduced the award to $168 million, including $56 million in compensatory damages and $112 million in punitive damages.

The Fifth US Circuit Court of Appeals upheld the ruling in 2025, following which TCS moved the US Supreme Court.

In its petition, TCS argued that DXC had been awarded damages based entirely on “unjust enrichment” without proving actual losses. It also contended that the punitive damages were excessive under US trade secrets law.

DXC opposed the petition, arguing that “nothing about the court of appeals’ fact-bound application of settled law warrants further review.”