Is Tech Mahindra overvalued or undervalued?

As of 8 October 2025, Tech Mahindra's valuation grade has moved from expensive to very expensive, indicating a significant increase in perceived overvaluation. The company is currently considered overvalued based on its financial ratios, with a PE ratio of 31.40, an EV to EBITDA of 18.70, and a Price to Book Value of 5.21. These figures suggest that the stock is trading at a premium compared to its earnings and book value. In comparison to its peers, Tech Mahindra's valuation stands out as particularly high; for instance, TCS has a PE ratio of 22.23 and Infosys at 22.78, both categorized as fairly valued. Additionally, the PEG ratio for Tech Mahindra is notably low at 0.39, which could indicate that growth expectations are not being met by its current price. Recent stock performance shows that while Tech Mahindra has outperformed the Sensex over the last week, it has underperformed significantly year-to-date and over the past year, reinforcing the notion that the stock may be overvalued in the current market environment.