TCS likely to lead its peers in revenue growth: UBS

New Delhi, Feb 27 (IANS) TCS is expected to lead in revenue growth and margin improvement in FY25, according to a report by UBS. The foreign brokerage believes TCS can deliver industry-leading growth and margins among peers in the next fiscal year.

UBS stated, “We see enough drivers to believe TCS can deliver industry-leading growth and margins among peers in FY25.” These factors include ramp-up of large deals, BFSI segment revival, cloud migration projects, and continued demand strength for managed services.

The brokerage also expects a significant fall in attrition to aid in gross margins, possible 200 bp additional improvement in utilisation, and cost reductions in subcontracting. The two-factor regression model suggests gross margin could expand by more than 100 bp in the next four to six quarters.

UBS has raised FY25/26 EPS estimates by 3 percent/9 percent and upgraded TCS, valuing the company at 28x PE on FY26E EPS. TCS’ current multiple premium over peers is below the historical average, indicating a potential re-rating in the future.

TCS shares rose by 2.5 percent on Tuesday on the BSE to close at Rs 4,102. This positive outlook by UBS has sparked investor interest in TCS as it gears up for significant growth and margin improvement in the upcoming fiscal year.