Genpact vs Tech Mahindra Which Offers More Value?

Genpact and Tech Mahindra are two major players in the IT and Business Process Outsourcing (BPO) industry in India. Both companies have established themselves as leading providers of technology and consulting services to a global clientele. While Genpact has a strong presence in finance and accounting services, Tech Mahindra specializes in telecommunications and information technology services. Investors looking to diversify their portfolio in the IT sector should consider the performance and growth potential of Genpact and Tech Mahindra stocks.

Genpact or Tech Mahindra?

When comparing Genpact 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 Genpact 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. Genpact has a dividend yield of 1.6%, while Tech Mahindra has a dividend yield of 3.4%. Beyond the yield itself, considering the growth and sustainability of these dividends is also crucial. Genpact reports a 5-year dividend growth of 12.89% year and a payout ratio of 16.07%. 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 Genpact P/E ratio at 12.61 and Tech Mahindra's P/E ratio at 46.10. Another crucial valuation metric is the Price-to-Book (P/B) Ratio, which compares stock price with book value per share. Genpact P/B ratio is 3.49 while Tech Mahindra's P/B ratio is 5.71.

Growth Investors:

Growth investors prioritize metrics indicative of a company's expansion potential. Focusing on top-line growth, Genpact has seen a 5-year revenue growth of 0.56%, while Tech Mahindra's is 0.50%. Return on Equity (ROE) measures how effectively a company uses equity investment to generate earnings, with Genpact's ROE at 28.58% 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 $45.77 for Genpact and ₹1666.05 for Tech Mahindra. Over the past year, Genpact's prices ranged from $30.23 to $47.98, with a yearly change of 58.72%. Tech Mahindra's prices fluctuated between ₹1128.00 and ₹1761.85, with a yearly change of 56.19%. Brand recognition also plays a role, as familiarity with a company can influence investment decisions.