Is Tech Mahindra overvalued or undervalued?

As of 2 July 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 considered overvalued. Key ratios include a PE ratio of 38.68, an EV to EBITDA of 22.84, and a PEG ratio of 0.48, which suggests that while the company is growing, its price relative to earnings growth is quite high. In comparison to its peers, Tech Mahindra's PE ratio significantly exceeds that of TCS at 25.51 and Infosys at 25.04, both of which are rated more favorably. Additionally, Tech Mahindra's EV to EBITDA ratio is higher than that of HCL Technologies, which stands at 17.37. Despite a strong return of 14.10% over the past year compared to the Sensex's 5.00%, the high valuation ratios indicate that Tech Mahindra may not be a prudent investment at its current price level.