Tata Consultancy Services has established a new wholly owned subsidiary in the Kingdom of Saudi Arabia, marking a significant expansion in the Middle East region. The IT services giant incorporated 'Tata Consultancy Services Regional Headquarters' on January 18, 2026, through its Netherlands-based subsidiary.

Strategic Incorporation Details

The new subsidiary was incorporated through Tata Consultancy Services Netherlands B.V., making it a step-down subsidiary of the parent company. This structure demonstrates TCS's strategic approach to international expansion and compliance with local regulatory requirements.

Investment and Ownership Structure

The incorporation involves a substantial financial commitment from TCS, with the company maintaining complete control over the new entity.

Compliance with KSA Vision 2030

The establishment of this regional headquarters serves a critical regulatory purpose in Saudi Arabia. The Kingdom's Regional Headquarters Program mandates that multinational companies maintain a licensed RHQ in Riyadh as a prerequisite for participating in government and semi-government project bidding.

Key aspects of the RHQ program include:

• Mandatory Requirement: Licensed RHQ formation is essential for government project eligibility
• Strategic Alignment: Supports KSA Vision 2030 objectives
• Investment Attraction: Promotes foreign direct investment in the Kingdom
• Localization Focus: Encourages localized decision-making processes
• Long-term Commitment: Strengthens multinational companies' commitment to the Saudi market

Business Implications

This incorporation positions TCS to capitalize on the growing IT services market in Saudi Arabia and the broader Middle East region. The regional headquarters structure will enable the company to participate in lucrative government contracts while demonstrating its commitment to the Saudi market.

The move aligns with Saudi Arabia's ambitious Vision 2030 program, which aims to diversify the Kingdom's economy and reduce its dependence on oil revenues. By establishing a formal presence through the RHQ structure, TCS can better serve local clients and compete for significant government and semi-government projects in the region.

Regulatory Compliance

The incorporation was disclosed under Regulation 30 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, ensuring transparency for stakeholders. The company confirmed that no additional governmental or regulatory approvals are required for this acquisition, streamlining the establishment process.

Tata Consultancy Services delivered strong financial performance in Q3FY26, demonstrating continued growth momentum across key business segments. The company reported revenue of ₹67,087 crores for the quarter ended December 31, 2025, reflecting sustained demand for its technology services and AI-driven solutions.

Financial Performance Overview

The company's financial metrics for Q3FY26 showcased robust performance across multiple parameters:

International services revenues grew 0.4% sequentially in constant currency, with growth led by Consumer Business Group, Energy Resources & Utilities, Life Sciences & Healthcare, and Communications Media & Information verticals. The BFSI and Technology Software and Services segments performed well when adjusted for seasonality.

AI Services Drive Growth Momentum

TCS's artificial intelligence services emerged as a significant growth driver, achieving remarkable momentum during the quarter. The company's AI services now generate $1.8 billion in annualized revenue, representing 17.3% quarter-on-quarter growth in constant currency. This performance underscores the company's successful transformation into an AI-led technology services provider.

The rate of production deployments for AI projects in 2025 showed marked improvement over the prior year, with Q3FY26 performance further reinforcing this positive trend. TCS delivered over three times more rapid builds for customers this quarter compared to previous periods, demonstrating accelerated innovation-to-build cycles.

Strong Deal Wins and Client Expansion

TCS secured significant contract wins during Q3FY26, achieving total contract value (TCV) of $9.3 billion across various markets and industries:

On a last twelve months (LTM) basis, TCS gained 2 additional clients generating more than $100 million in revenue, 8 clients exceeding $20 million, and 23 clients bringing in over $1 million each.

Operational Excellence and Margin Stability

Despite various operational challenges, TCS maintained stable operating margins at 25.2% during Q3FY26. The company achieved 80 basis points benefit from improvements in productivity, pyramid optimization, and other operational efficiencies. Favorable currency movements contributed an additional 20 basis points, while full quarter impact of wage increases had a negative impact of 50 basis points.

The company's cash flow performance remained strong with net cash from operations at $1.6 billion, representing 130.4% of net income. Free cash flows reached $1.4 billion, while invested funds stood at $7.1 billion at period end.

Strategic AI Ecosystem Investments

TCS continued expanding its AI ecosystem presence through strategic partnerships and acquisitions. The company announced a $1 billion equity partnership with TPG, a leading global alternative asset management firm, to support growth of GW-scale AI data center infrastructure build-out.

Additionally, TCS announced the acquisition of Coastal Cloud in the U.S. to strengthen Salesforce and AI consulting services. Combined with ListEngage, TCS now ranks among the top 5 global Salesforce consultants, gaining over 500 experts and 3,400 certifications while boosting CRM capabilities.

Workforce and Talent Development

At the end of Q3FY26, TCS's global headcount stood at 582,163 associates from 149 nationalities, with 35.1% women representation. The company completed 51.2 million learning hours year-to-date and acquired 3.8 million competencies. Notably, TCS now has 217,000+ employees with higher-order AI skills, representing a 3x increase over the previous year.