Infosys vs Tech Mahindra Which Outperforms?

Infosys and Tech Mahindra are two of the leading IT services companies in India. Both companies have a strong presence in the global market and have been consistently delivering solid financial performance over the years. While Infosys is known for its strong focus on innovation and digital transformation services, Tech Mahindra is recognized for its expertise in telecommunications and IT consulting. Investors often compare the two stocks to assess their growth potential and market performance in the competitive IT services industry.

Infosys or Tech Mahindra?

When comparing Infosys 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 Infosys 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. Infosys has a dividend yield of 2.66%, 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. Infosys reports a 5-year dividend growth of -5.23% year and a payout ratio of 70.73%. 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 Infosys P/E ratio at 28.25 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. Infosys P/B ratio is 8.46 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, Infosys has seen a 5-year revenue growth of 0.65%, while Tech Mahindra's is 0.50%. Return on Equity (ROE) measures how effectively a company uses equity investment to generate earnings, with Infosys's ROE at 31.58% 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 $21.77 for Infosys and ₹1666.05 for Tech Mahindra. Over the past year, Infosys's prices ranged from $16.04 to $23.48, with a yearly change of 46.38%. 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.