Is Tech Mahindra overvalued or undervalued?

As of 1 October 2025, Tech Mahindra's valuation grade has moved from very expensive to expensive, indicating a shift in market perception. The company is currently considered overvalued based on its key financial ratios. The PE ratio stands at 30.56, while the EV to EBITDA ratio is 18.18, both of which are higher than those of its peers. For instance, TCS has a PE ratio of 21.4 and an EV to EBITDA of 15.05, while Infosys shows a PE of 22.03 and an EV to EBITDA of 14.44. In comparison to its peers, Tech Mahindra's PEG ratio of 0.38 suggests it may be undervalued relative to its growth prospects, but the overall high valuation metrics indicate it is overvalued in the current market context. The company's recent stock performance has lagged behind the Sensex, with a year-to-date return of -16.95% compared to the Sensex's 3.64%, further reinforcing the notion that Tech Mahindra may not be a favorable investment at this time.