TECHM.NS
Tech Mahindra Limited (TECHM.NS) is a prominent figure in the IT services sector with a considerable market capitalization of ₹1,417.951 billion. The stock's Price-to-Earnings (P/E) ratio is relatively high at 43.53, indicating that investors might expect significant growth or perceive the stock as overvalued relative to its earnings. A Return on Equity (ROE) of 12.316% suggests that Tech Mahindra is generating respectable returns on shareholders' equity but could be more efficient compared to industry leaders.
The company's debt-to-equity ratio of 7.566 is quite low, signifying conservative use of debt financing, which is a positive aspect for risk-averse investors. Tech Mahindra's current ratio stands at 1.853, indicating a strong capability to satisfy short-term liabilities, reflecting good short-term financial health. However, the operating margin is 9.618%, lower than what might be expected from leading firms, pointing toward challenges in minimizing operating costs or achieving higher efficiency.
A sizeable free cash flow of ₹40.125 billion empowers Tech Mahindra to pursue new projects and innovations without relying solely on external financing. Despite a modest earning growth rate of 1.531%, the revenue growth is slow at 3.5% which might concern investors looking for high-growth opportunities. An EBITDA margin of 10.288% adds a layer of reliability to its profitability from core operations.
The price-to-book ratio of 5.36857 indicates that the stock might be trading at a high valuation compared to its book value, which could be a point of caution for value investors. Institutional investors hold 41.643% of the shares, reflecting a strong vote of confidence from large investors in Tech Mahindra’s potential despite the mixed financial metrics.
This analysis provides a comprehensive view of Tech Mahindra's financial landscape, offering insights for potential investors who are considering its stock for diversification, especially those interested in the IT services space in India. Investors should weigh the potential for steady returns against slower growth and operational challenges when considering investment in Tech Mahindra.
Last Updated: January 14, 2025
| Metric | Value |
|---|---|
| Market Cap | 1482.46 B |
| P/E Ratio | 45.42 |
| ROE | 12.32 % |
| Debt to Equity | 7.566 |
| Operating Margin | 9.62 % |
| Free Cash Flow | 40.13 B |
| Institutional Holdings | 41.50 % |
| Revenue Growth | 3.50 % |
Tech Mahindra's competition spans across various IT service segments:
- Information Technology Services: Key competitors include TCS, Infosys, and Wipro.
- Telecommunications Solutions: Notable competitors are Ericsson and Nokia.
- Digital Transformation and Consulting: Accenture and Capgemini are major players.
Tech Mahindra holds a competitive edge in IT services, especially in telecommunications, due to its focus on innovation and customer-centric solutions. While facing strong competition from established giants and specialized firms in the digital transformation space, Tech Mahindra can leverage its agility and industry-specific expertise to continue growing. Investors should note the fast-paced nature of this market, where continuous adaptation and investment in new technologies are crucial for maintaining leadership and expanding market share.
Disclaimer: The information provided here is for educational and informational purposes only. While we strive to ensure the accuracy and reliability of the data, we do not make any guarantees regarding its completeness or accuracy. The analysis and metrics provided should not be considered as investment advice, and any actions taken based on this information are at your own risk. We do not assume responsibility for any financial losses or other damages incurred from the use of this data. Please consult with a qualified financial advisor before making any investment decisions.