Is TCS overvalued or undervalued?

As of 4 June 2025, TCS has moved from a fair to an attractive valuation grade. The company is currently considered undervalued, supported by a PE ratio of 25.23, an EV to EBITDA ratio of 17.63, and a robust ROE of 51.24%. In comparison to its peers, Infosys has a PE ratio of 24.32 and an EV to EBITDA of 15.83, while HCL Technologies shows a slightly higher PE ratio of 25.52 and an EV to EBITDA of 16.52.
Despite the attractive valuation, TCS has underperformed relative to the Sensex, with a year-to-date return of -16.51% compared to the Sensex's 5.58%. This performance highlights the potential for recovery and growth in TCS's stock price, reinforcing the notion that the company is currently undervalued in the market.