Is TCS overvalued or undervalued?

As of 8 October 2025, TCS's valuation grade has moved from attractive to fair, indicating a shift in its perceived value. The company is currently fairly valued, with a price-to-earnings (PE) ratio of 22.23, a price-to-book value of 11.56, and an EV to EBITDA ratio of 15.65. In comparison to peers, Infosys has a PE ratio of 22.78, while HCL Technologies stands at 23.22, suggesting that TCS is competitively priced within its industry.
Despite the recent stock performance showing a decline of 26.12% year-to-date compared to a 4.65% gain in the Sensex, TCS maintains strong fundamentals, including a return on equity (ROE) of 51.24% and a dividend yield of 4.20%. These metrics highlight the company's robust operational efficiency, even as its stock price has not reflected this strength in the market.