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: 54/100
Tech Mahindra Ltd.
IT
Quality Score: 54/100
At a glance
| Metric | TCS | TECHM |
|---|---|---|
| Quality Score | 54/100 | 54/100 |
| P/E (trailing) | 17.6 | 27.0 |
| Forward P/E | 14.5 | 17.1 |
| ROE | +48.4% | +16.6% |
| Profit margin | +18.4% | +8.5% |
| Debt-to-equity | 10.39 | 7.27 |
| Dividend yield | +5.18% | +3.49% |
| 1Y price return | -28.4% | +0.6% |
| From 52w high | -31.8% | -21.1% |
| Analyst rating1 = Strong Buy, 5 = Strong Sell | 2.12 | 2.25 |
Highlighted value = better on the metric (lower for P/E, D/E, drawdown, analyst rating; higher elsewhere). Descriptive only.
Snapshots
TCS trades at ₹2,394.40, down 28.41% over 12 months and 31.77% below its 52-week high, with the price sitting 17.6% below the 200-DMA at the time of analysis. Against this technical backdrop, the company reports an ROE of 48.4% — highest among its 6 tracked IT peers — and a 5.18% dividend yield, though the dividend has been cut for a second consecutive year. An active governance investigation at the Nashik facility adds a reputational risk dimension not visible in the trailing financial metrics.
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 48.4% ranks 1st among 6 tracked IT sector peers (HCLTECH 23.36%, INFY 31.44%, TECHM 16.61%, WIPRO 15.49%, LTM 21.29%), and has been above 15% in 4 of the available historical years.
- ✓FCF has been positive in 4 of the available recorded years, with a consistency score of 59, indicating above-average earnings-to-cash conversion relative to the historical record.
- ✓Trailing dividend yield of 5.18% is notable for a large-cap IT name; forward PE of 14.47 compresses the valuation multiple further when projected earnings are used.
- ✓5-year earnings CAGR of 12.2% and revenue CAGR of 9.6% reflect sustained top- and bottom-line growth over a multi-year horizon despite current near-term headwinds.
- ✓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 is 31.77% below the 52-week high and 17.6% below the 200-DMA (₹2,901.17), with losses of 28.41% over 12 months and 20.16% over 3 months — among the steepest drawdowns in the measured IT peer group.
- ✗Active governance risk: Nashik facility allegations led to an internal probe ordered by the Chairman and 7 SIT arrests as of April 2026, representing an ongoing legal and reputational exposure.
- ✗Dividend has been reduced for two consecutive years, with cash being redirected to AI infrastructure investment; payouts to parent Tata Sons have also declined, signalling a shift in capital allocation priorities.
- ✗Debt-to-equity of 10.39 is on a rising trend; while IT firms are not capital-intensive in the traditional sense, this trajectory alongside declining dividend capacity constrains financial flexibility.
- ✗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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For informational purposes only. Not investment advice. VivaTrades is not a SEBI-registered Investment Adviser or Research Analyst. Comparison reflects current public data; consult a registered adviser before any investment decision.