Tech Mahindra vs Birlasoft Which Offers More Value?

Tech Mahindra and Birlasoft are two prominent players in the Indian IT industry, both listed on the stock market. Tech Mahindra, a part of the Mahindra Group, specializes in providing IT solutions and services to a wide range of industries. Birlasoft, on the other hand, is a global IT services provider, known for its innovative solutions in digital and data technologies. Investors often compare the stock performance of these two companies to make informed investment decisions in the ever-evolving tech sector.

Tech Mahindra or Birlasoft?

When comparing Tech Mahindra and Birlasoft, 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 Tech Mahindra and Birlasoft.

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. Tech Mahindra has a dividend yield of 2.41%, while Birlasoft has a dividend yield of 1.07%. Beyond the yield itself, considering the growth and sustainability of these dividends is also crucial. Tech Mahindra reports a 5-year dividend growth of 25.74% year and a payout ratio of 0.00%. On the other hand, Birlasoft reports a 5-year dividend growth of 20.11% year and a payout ratio of 28.93%.

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 Tech Mahindra P/E ratio at 48.22 and Birlasoft's P/E ratio at 27.30. Another crucial valuation metric is the Price-to-Book (P/B) Ratio, which compares stock price with book value per share. Tech Mahindra P/B ratio is 5.97 while Birlasoft's P/B ratio is 5.20.

Growth Investors:

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

Retail Investors:

Retail investors often consider stock affordability and company familiarity. For example, day low prices are ₹1775.60 for Tech Mahindra and ₹604.25 for Birlasoft. Over the past year, Tech Mahindra's prices ranged from ₹1162.95 to ₹1797.00, with a yearly change of 54.52%. Birlasoft's prices fluctuated between ₹536.30 and ₹861.85, with a yearly change of 60.70%. Brand recognition also plays a role, as familiarity with a company can influence investment decisions.