Tech Mahindra Ltd.
IT · NSE
52-week range
₹1,304 – ₹1,854
From 52w high
-21.1%
RSI (14)
52.9
vs SMA 50 / 200
↑ 50 · ↓ 200
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.
- ✓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.
- ✗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.
- ·Q4 FY26 results (April 22) showed net profit up 16% to ₹1,354 crore and the highest-ever FY26 dividend, but the stock fell 2.5% on the day as brokerages were publicly divided on valuation — TradingView reported the split.
- ·A Yahoo Finance piece dated May 4 described the investment story as shifting after a "fair value reset," suggesting a re-evaluation of the stock's risk-reward after the price decline.
- ·Shares edged higher on May 9 amid broader IT sector focus, though this was noted as a minor move in a context of sector rotation rather than a company-specific catalyst.
- ?Does the D/E of 7.27 reflect a structural financing model (e.g., acquisition debt from legacy deals) or a cyclical financing decision, and what is management's stated deleveraging timeline?
- ?Given that ROE has been above 15% in only 3 of the available years and sits at the bottom of the peer group, does the current forward-PE compression assume a mean-reversion in margins that the 5-year track record supports?
- ?The 5-year earnings CAGR of 15.9% is solid, yet the quality score of 46 and consistency score of 41 are both below peer medians — how much of past growth was driven by one-time items or favorable currency effects versus sustainable operational improvement?
- ?With brokerages publicly divided post-Q4 results and a 12-month return of 0.61%, what specific operational or structural milestones would indicate whether the gap between trailing and forward PE is closing as expected?
PE
27.0
Forward PE
17.1
ROE
+16.6%
Profit margin
+8.5%
D/E
7.27
Dividend yield
+3.5%
Quality score
46/100
ROE 5y above 15%
3/5 yrs
FCF 5y positive
4/5 yrs
For informational purposes only. Not investment advice. VivaTrades is not a SEBI-registered Investment Adviser or Research Analyst. Market data sourced from public feeds; consult a registered adviser before any investment decision.Analysis generated 10 May 2026.