bengaluru, April 13 -- Tata Consultancy Services Ltd's (TCS) shareholder payouts to its parent Tata Sons have shown a fluctuating but broadly downward trend in recent years, potentially constraining the holding company's ability to fund its capital-intensive businesses. The lower shareholder payouts come as TCS's acquisitions and its entry into the data centre business last year weighed on cash flows, and may come under further pressure as the company continues to explore acquisition opportunities. Its latest payout of Rs.28,292.1 crore in the financial year ended March 2026 (FY26) was lower than the previous year's Rs.32,184.2 crore, marking the third decline in total shareholder returns-comprising dividends and buybacks-over the past six years, and the fourth such fall since the company went public in 2004. This 12.1% fall in total payouts in FY26 follows a 3.87% decline in FY24. At least twice before-in 2021 and 2016-Tata Sons' income from TCS dropped over the previous year. As India's largest IT services company continues to explore acquisition opportunities, analysts are questioning whether Tata Sons can continue to rely on cash from its crown jewel, TCS, which accounted for 83% of Tata Sons' Rs.38,835 crore revenue in the year ended March 2025 (FY25). Shares of TCS closed 2.45% lower at Rs.2,524.35 apiece on the BSE on Friday, a day after the company reported its first annual revenue decline in dollar terms since listing. TCS's lower payouts to its parent come at a time when Tata Sons, under chairman N. Chandrasekaran, is investing heavily in four cash-guzzling businesses including e-commerce (Tata Digital), aviation (Air India), battery manufacturing (Agratas) and semiconductor manufacturing (Tata Electronics). Tata Sons has poured over $11 billion into these four businesses, according to a Mint review of the financials of the four privately-held companies. A fall in TCS's payout to shareholders in FY26 was due to the company spending Rs.6,770 crore on two acquisitions - Rs.6,386 crore on Salesforce consulting firm Coastal Cloud in December and Rs.612 crore on ListEngage, another Salesforce marketing firm, in October last year. These acquisitions led to a 7.5% decline in TCS's free cash flow to Rs.42,983 crore in FY26. "TCS's foray into data centres makes this business relatively more asset-heavy than in the past, and this will be a drag on free cash flow generation," said Pramod Gubbi, founder of Marcellus Investment Managers, a Mumbai-based portfolio management service firm. "With its operating cash flow growth being challenged by AI-driven deflationary forces, there doesn't seem to be an offset to this drag, putting pressure on cash returns." In October last year, TCS announced its largest AI pivot after its management said it would invest $6.5 billion over six years to build 1 GW (gigawatt) of data centre capacity. A second analyst voiced similar concerns, adding that dividends last year contributed to the higher shareholder payout. "Going forward, TCS might give lesser shareholder payouts to parent Tata Sons if it continues to invest in data centres, ecosystem partnerships, and AI-related ventures like labs and dedicated AI centres for clients," said Karan Uppal, lead IT analyst at PhillipCapital. For now, the company's management said that it would continue to acquire companies. "Our focus will be to ensure growth and profitability, so we will not be shying away from making the right investments for ensuring strategic growth," said Samir Seksaria, chief financial officer of TCS, during the company's post-earnings analyst meet on Thursday. He added that the company "will continue our focus on the build, acquire and partner framework, and investments around that would be part of it (focus on growth and margins)."...