Birlasoft vs Tech Mahindra Which Is More Favorable?

Birlasoft and Tech Mahindra are two prominent IT companies in India with significant presence in the global market. Both companies operate in the same sector but with distinct business models and strategies. Birlasoft focuses on providing digital transformation and IT services to clients across various industries, while Tech Mahindra specializes in offering IT and business process outsourcing services. Investors considering these stocks should carefully analyze their financial performance, market positioning, and growth prospects to make informed investment decisions.

Birlasoft or Tech Mahindra?

When comparing Birlasoft and Tech Mahindra, different investors may prioritize various metrics based on their investment strategies and goals. So, ask yourself what type of investor you are. This will guide you in determining which metrics are most important for your investment decision between Birlasoft and Tech Mahindra.

Dividend Investors:

Dividend investors look for stable and growing income streams, using dividend metrics to assess potential investments. A company's dividend yield essentially measures the size of its dividend relative to the total market value of the company. Birlasoft has a dividend yield of 1.08%, while Tech Mahindra has a dividend yield of 2.39%. Beyond the yield itself, considering the growth and sustainability of these dividends is also crucial. Birlasoft reports a 5-year dividend growth of 20.11% year and a payout ratio of 28.93%. On the other hand, Tech Mahindra reports a 5-year dividend growth of 25.74% year and a payout ratio of 0.00%.

Value Investors:

Value investors focus on financial metrics to determine a stock's intrinsic value compared to its market value. The Price-to-Earnings (P/E) Ratio links stock price to a company's earnings per share, with Birlasoft P/E ratio at 27.08 and Tech Mahindra's P/E ratio at 48.59. Another crucial valuation metric is the Price-to-Book (P/B) Ratio, which compares stock price with book value per share. Birlasoft P/B ratio is 5.16 while Tech Mahindra's P/B ratio is 6.01.

Growth Investors:

Growth investors prioritize metrics indicative of a company's expansion potential. Focusing on top-line growth, Birlasoft has seen a 5-year revenue growth of 0.60%, while Tech Mahindra's is 0.50%. Return on Equity (ROE) measures how effectively a company uses equity investment to generate earnings, with Birlasoft's ROE at 20.31% and Tech Mahindra's ROE at 12.22%.

Retail Investors:

Retail investors often consider stock affordability and company familiarity. For example, day low prices are ₹593.10 for Birlasoft and ₹1761.00 for Tech Mahindra. Over the past year, Birlasoft's prices ranged from ₹536.30 to ₹861.85, with a yearly change of 60.70%. Tech Mahindra's prices fluctuated between ₹1162.95 and ₹1807.70, with a yearly change of 55.44%. Brand recognition also plays a role, as familiarity with a company can influence investment decisions.