Is Birlasoft Ltd overvalued or undervalued?

As of 4 July 2025, Birlasoft Ltd has moved from a fair to an attractive valuation grade, indicating a positive shift in its market perception. The company appears to be undervalued, particularly when considering its key ratios: a PE ratio of 23.41, an EV to EBITDA of 14.83, and a ROCE of 35.42%. Compared to peers, TCS has a PE ratio of 25.49 and EV to EBITDA of 17.82, while Infosys shows a PE of 25.51 and EV to EBITDA of 16.64, suggesting that Birlasoft is trading at a discount relative to its more established competitors.
Despite a challenging year-to-date return of -22.33%, Birlasoft's recent performance has outpaced the Sensex over the past month, with a stock return of 8.02% compared to the Sensex's 3.01%. This performance, along with its attractive valuation metrics, reinforces the view that Birlasoft Ltd is currently undervalued in the market.