Is Tech Mahindra overvalued or undervalued?

As of 27 June 2025, the valuation grade for Tech Mahindra has moved from very expensive to expensive, indicating a shift in perception regarding its market valuation. The company is currently deemed overvalued based on its financial metrics. Key ratios include a PE ratio of 38.58, an EV to EBITDA of 22.78, and a PEG ratio of 0.48, which suggests that while growth expectations are high, the current price may not be justified by its earnings growth.
In comparison to its peers, Tech Mahindra's PE ratio significantly exceeds that of TCS at 25.66 and Infosys at 25.02, both of which are rated more favorably. Additionally, HCL Technologies and Wipro, which are also in the attractive range, have lower valuations with PE ratios of 26.92 and 21.19, respectively. Despite a strong one-year return of 16.97% compared to the Sensex's 6.08%, the overall valuation metrics indicate that Tech Mahindra is overvalued in the current market context.