HCLTECH vs TECHM
Side-by-side comparison of HCL Technologies Ltd. and Tech Mahindra Ltd.. Descriptive only — not investment advice.
HCL Technologies Ltd.
IT
Quality Score: 52/100
Tech Mahindra Ltd.
IT
Quality Score: 54/100
At a glance
| Metric | HCLTECH | TECHM |
|---|---|---|
| Quality Score | 52/100 | 54/100 |
| P/E (trailing) | 19.5 | 27.0 |
| Forward P/E | 15.0 | 17.1 |
| ROE | +23.4% | +16.6% |
| Profit margin | +12.8% | +8.5% |
| Debt-to-equity | 6.93 | 7.27 |
| Dividend yield | +8.01% | +3.49% |
| 1Y price return | -20.9% | +0.6% |
| From 52w high | -31.4% | -21.1% |
| Analyst rating1 = Strong Buy, 5 = Strong Sell | 2.95 | 2.25 |
Highlighted value = better on the metric (lower for P/E, D/E, drawdown, analyst rating; higher elsewhere). Descriptive only.
Snapshots
HCLTECH trades at ₹1,198.40, down 20.86% over the past year and 31.39% below its 52-week high, sitting below both the 50-DMA (₹1,318.98) and 200-DMA (₹1,461.28). The Q4 FY26 earnings release in late April 2026 triggered a single-session decline of over 10% accompanied by brokerage target-price cuts, while management guided for muted FY27 growth. Trailing PE of 19.54 sits above larger peers despite a quality score (40) that ranks last among the six IT peers analyzed.
Tech Mahindra (TECHM) trades at ₹1,463, fractionally below its 200-DMA (₹1,492.97), having returned 0.61% over the past 12 months against a 21.09% drawdown from its 52-week high. The company reported Q4 FY26 net profit up 16% YoY and declared its highest-ever annual dividend, yet the stock slipped on results day as brokerages diverged on valuation — with a trailing PE of 27 that is the highest in its six-peer IT group while ROE of 16.61% is the lowest.
Pros
- ✓ROE of 23.36% has remained above 15% in 4 of the available years, and FCF was positive in 4 of those years, indicating a degree of earnings and cash-generation consistency.
- ✓Forward PE of 14.97 represents a meaningful compression from the trailing PE of 19.54, implying that current analyst earnings estimates embed a recovery in profitability relative to today's price.
- ✓5-year revenue CAGR of 5.3% indicates the business has grown its top line in absolute terms even as net margin faced pressure (profit margin: 12.8%).
- ✓Dividend yield of 8.01% at current price is among the highest in large-cap IT, reflecting the extent of price decline rather than an elevated payout; the absolute dividend has remained in place through recent quarters.
- ✓Revenue and earnings 5-year CAGRs of 12.6% and 15.9% respectively show consistent top-line and bottom-line expansion over a multi-year horizon.
- ✓FCF was positive in 4 of 5 available years, and debt trend is classified as falling — indicating improving balance-sheet trajectory even if current leverage remains elevated.
- ✓Dividend yield of 3.49% is material for a large-cap IT name; the Q4 FY26 declaration was the highest annual dividend in company history.
- ✓Forward PE of 17.11 represents a 36.6% compression from the trailing PE of 26.99, reflecting consensus expectations of meaningful earnings expansion in FY27.
Cons
- ✗Price has declined 24.69% over the past three months and remains below both the 50-DMA and 200-DMA with no identified technical support levels, leaving the nearest reference points as resistance levels at ₹1,447, ₹1,643, and ₹1,747.
- ✗Q4 FY26 results prompted multiple brokerages to cut target prices and the stock fell over 10% in a single session on 22-Apr-2026; management guided for muted FY27 revenue after what it called its fastest growth in three years — a combination of earnings disappointment and cautious forward guidance.
- ✗5-year earnings growth of -0.2% against 5-year revenue growth of 5.3% indicates that revenue gains have not translated into earnings expansion, compressing profit margins over the period.
- ✗Quality score of 40 ranks 6th (last) among 6 IT peers; D/E of 6.935 is materially higher than typically reported for large-cap IT software businesses and merits examination of the underlying liability composition.
- ✗D/E of 7.27 is an outlier for IT services, where peers such as TCS and Infosys carry near-zero financial leverage; this level of debt amplifies downside risk if revenue growth decelerates.
- ✗ROE of 16.61% is the lowest among the six peers benchmarked, trailing INFY (31.44%), TCS (48.4%), HCLTECH (23.36%), and LTM (21.29%), and sits above 15% in only 3 of available historical years.
- ✗Trailing PE of 26.99 is the highest in the peer set (range 15.6–25.8), meaning TECHM commands a valuation premium despite ranking last on quality score (46 vs sector leader INFY at 60).
- ✗Price is below the 200-DMA and has returned under 1% over 12 months, with a 3-month decline of 11.08% and a 21% drawdown from the 52-week high — reflecting sustained selling pressure over an extended period.
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