TCS vs TECHM
Side-by-side comparison of Tata Consultancy Services Ltd. and Tech Mahindra Ltd.. Descriptive only — not investment advice.
Tata Consultancy Services Ltd.
IT
Quality Score: 59/100
Tech Mahindra Ltd.
IT
Quality Score: 50/100
At a glance
| Metric | TCS | TECHM |
|---|---|---|
| Quality Score | 59/100 | 50/100 |
| P/E (trailing) | 15.7 | 27.4 |
| Forward P/E | 12.9 | 17.4 |
| ROE | +48.4% | +16.6% |
| Profit margin | +18.4% | +8.5% |
| Debt-to-equity | 10.39 | 7.27 |
| Dividend yield | +5.84% | +3.44% |
| 1Y price return | -37.2% | -1.1% |
| From 52w high | -37.6% | -20.0% |
| Analyst rating1 = Strong Buy, 5 = Strong Sell | 2.05 | — |
Highlighted value = better on the metric (lower for P/E, D/E, drawdown, analyst rating; higher elsewhere). Descriptive only.
Snapshots
TCS (IT sector) trades at ₹2,125 as of 2026-06-22, 37.57% below its 52-week high, below both the 50-DMA (₹2,326.99) and 200-DMA (₹2,751.85). Trailing PE is 15.71 with a forward PE of 12.89, while ROE of 48.4% ranks first among 6 tracked IT peers. A confirmed $70 million litigation charge following the US Supreme Court ruling in June 2026 adds a near-term financial headwind.
Tech Mahindra (TECHM) trades at ₹1,483.5, roughly flat over 12 months (-1.1%) and 20% below its 52-week high. The stock sits just below its 200-DMA at ₹1,490, while posting an 11.3% gain over three months. Among six large-cap IT peers, TECHM ranks fifth on ROE (16.61%) and carries a D/E of 7.27 — the highest in the group — alongside a trailing PE of 27.4 that is above every comparable peer.
Pros
- ✓ROE of 48.4% is the highest among six tracked IT peers (INFY: 31.44%, HCLTECH: 23.36%, LTM: 21.29%, TECHM: 16.61%, WIPRO: 15.44%), reflecting durable capital efficiency.
- ✓5-year earnings CAGR of 12.2% and revenue CAGR of 9.6% demonstrate consistent compounding over the persistence window of 4 tracked years.
- ✓Moody's upgraded TCS to A2 (May 2026) and a multimillion-euro AI-powered IT modernisation deal was signed with Canada Life (June 2026), indicating ongoing deal flow in the enterprise segment.
- ✓Dividend yield of 5.84% at current price levels represents one of the higher yields in the large-cap IT peer group, with FCF positive in 4 of 4 tracked years supporting distributions.
- ✓Revenue has grown at a 5-year CAGR of 12.6% and earnings at 15.9%, suggesting the core business has expanded meaningfully over the medium term.
- ✓Debt trend is classified as falling, and FCF was positive in 4 of the available years, indicating some capacity to generate cash even during a period of elevated balance-sheet leverage.
- ✓Dividend yield of 3.44% is among the higher yields in the large-cap IT space, providing a return component independent of price appreciation.
- ✓Forward PE of 17.4 represents a 36% discount to the trailing PE of 27.4, indicating the analyst community embeds material earnings growth in near-term estimates for the stock.
Cons
- ✗Price has declined 37.17% over 12 months and remains 22.8% below the 200-DMA (₹2,751.85) and 8.7% below the 50-DMA (₹2,326.99), reflecting a sustained multi-month downtrend.
- ✗US Supreme Court rejected TCS's appeal, confirming a $70 million charge (Reuters, June 2026) — a material one-time hit to earnings in the near term.
- ✗Debt-to-equity of 10.39 is elevated relative to the capital-light nature of IT services, and the persistence data flags a rising debt trend — an atypical structural development for the segment.
- ✗Consistency score of 59/100 and quality score of 62 are below peers INFY (quality 65) and LTM (quality 65), indicating mid-tier execution consistency despite leading ROE.
- ✗D/E of 7.27 is the highest in the peer group by a wide margin; for an IT-services business where peers carry D/E well below 1.0, this level of leverage is a structural outlier and warrants scrutiny of the underlying debt composition.
- ✗ROE of 16.61% is fifth among six peers; TCS (48.4%), INFY (31.44%), and HCLTECH (23.36%) all generate substantially higher returns on equity, indicating a meaningful gap in capital efficiency.
- ✗Trailing PE of 27.4 is above all six peers despite the below-median ROE and quality score of 46 (fourth of six), creating a premium-valuation / below-median-quality combination.
- ✗The stock has spent extended time below its 200-DMA; the 52-week drawdown is -20.0% and the 12-month price return is -1.1%, underperforming several peers in absolute terms.
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