Infosys vs Tata Elxsi Which Should You Buy?

Infosys and Tata Elxsi are two prominent IT companies in India with a strong presence in the global market. Infosys, a multinational corporation known for its software development and consulting services, has a long-standing reputation for delivering innovative solutions to clients across various industries. On the other hand, Tata Elxsi, a subsidiary of the Tata Group, specializes in providing design and technology services for industries such as automotive, broadcast, and healthcare. Both companies have seen steady growth in their stock prices, making them attractive options for investors looking to capitalize on the booming IT sector.

Infosys or Tata Elxsi?

When comparing Infosys and Tata Elxsi, 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 Infosys and Tata Elxsi.

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. Infosys has a dividend yield of 2.5%, while Tata Elxsi has a dividend yield of 0.95%. Beyond the yield itself, considering the growth and sustainability of these dividends is also crucial. Infosys reports a 5-year dividend growth of -5.23% year and a payout ratio of 70.72%. On the other hand, Tata Elxsi reports a 5-year dividend growth of 40.67% 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 Infosys P/E ratio at 29.61 and Tata Elxsi's P/E ratio at 56.15. Another crucial valuation metric is the Price-to-Book (P/B) Ratio, which compares stock price with book value per share. Infosys P/B ratio is 8.87 while Tata Elxsi's P/B ratio is 18.44.

Growth Investors:

Growth investors prioritize metrics indicative of a company's expansion potential. Focusing on top-line growth, Infosys has seen a 5-year revenue growth of 0.65%, while Tata Elxsi's is 1.22%. Return on Equity (ROE) measures how effectively a company uses equity investment to generate earnings, with Infosys's ROE at 31.58% and Tata Elxsi's ROE at 34.06%.

Retail Investors:

Retail investors often consider stock affordability and company familiarity. For example, day low prices are $23.29 for Infosys and ₹7211.95 for Tata Elxsi. Over the past year, Infosys's prices ranged from $16.04 to $23.63, with a yearly change of 47.32%. Tata Elxsi's prices fluctuated between ₹6286.00 and ₹9200.00, with a yearly change of 46.36%. Brand recognition also plays a role, as familiarity with a company can influence investment decisions.