Tata Elxsi vs Infosys Which Should You Buy?

Tata Elxsi and Infosys are two major players in the Indian stock market, renowned for their technology and IT services offerings. Tata Elxsi, a subsidiary of the Tata Group, specializes in design and engineering services, while Infosys is a global leader in consulting and software development. Both companies have a strong track record of financial performance and innovation, making them popular choices for investors looking to capitalize on the growing tech sector. In this comparison, we will analyze the key differences and similarities between Tata Elxsi and Infosys stocks.

Tata Elxsi or Infosys?

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

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. Tata Elxsi has a dividend yield of 0.95%, while Infosys has a dividend yield of 2.5%. Beyond the yield itself, considering the growth and sustainability of these dividends is also crucial. Tata Elxsi reports a 5-year dividend growth of 40.67% year and a payout ratio of 0.00%. On the other hand, Infosys reports a 5-year dividend growth of -5.23% year and a payout ratio of 70.72%.

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 Tata Elxsi P/E ratio at 56.15 and Infosys's P/E ratio at 29.61. Another crucial valuation metric is the Price-to-Book (P/B) Ratio, which compares stock price with book value per share. Tata Elxsi P/B ratio is 18.44 while Infosys's P/B ratio is 8.87.

Growth Investors:

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

Retail Investors:

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