Is Tech Mahindra overvalued or undervalued?

As of 20 October 2025, the valuation grade for Tech Mahindra has moved from very expensive to expensive, indicating a shift in perception regarding its market value. The company is currently considered overvalued. Key ratios include a PE ratio of 31.57, an EV to EBITDA of 17.56, and a PEG ratio of 0.86, which suggests that while growth expectations may be present, the current valuation is not justified when compared to its peers. In comparison to notable peers, TCS has a PE ratio of 21.68 and Infosys stands at 21.59, both of which are significantly lower than Tech Mahindra's valuation. Additionally, HCL Technologies, which is rated attractive, has an EV to EBITDA of 5.76, further emphasizing the relative overvaluation of Tech Mahindra. The company's recent stock performance has lagged behind the Sensex, with a year-to-date return of -15.26% compared to the Sensex's 7.97%, reinforcing the notion that Tech Mahindra's current price may not reflect its true value in the market.