Fact based stock research
Tech Mahindra (NSEI:TECHM)
INE669C01036
How to read the free ranks
For every stock, we judge its performance against its peers and rank it on a scale of 1 to 100. The higher the rank, the better the stock performs than its peers. And, we do this for six investment strategies:
Value - shows how good of a value the stock is. Green is "inexpensive"; red is "expensive".
Growth - shows a company's growth potential. Green is "high growth" expected; red is "tough times ahead".
Safety - relates to the amount of debt a company has. Green is low debt level; red is high debt level.
Combined Financial - this isn't an average of the first three ranks but rather a consolidated view across several financial indicators. Green = good; red = tread carefully.
(NEW) Sentiment - quantifies professional analyst ratings and holdings as well as market pulse. Green = positive sentiment; red = skepticism (Only available to Premium Subscribers).
(NEW) 360° View - the ultimate rating with all financial and non-financial indicators.
Tech Mahindra stock research in summary
ANALYSIS: With an Obermatt Combined Rank of 78 (better than 78% compared with investment alternatives), Tech Mahindra (IT Consulting & oth. Services, India) shares have much better financial characteristics than comparable stocks. Shares of Tech Mahindra are low in value (priced high) with a consolidated Value Rank of 49 (worse than 51% of alternatives), and are riskily financed (Safety Rank of 45, which means above-average debt burdens) but show above-average growth (Growth Rank of 89). ...read more
RECOMMENDATION: A Combined Rank of 78, is a strong buy recommendation based on Tech Mahindra's financial characteristics. As the company Tech Mahindra shows low value with an Obermatt Value Rank of 49 (51% of comparable investments are less expensive), investors should look at the other ranks. In this case, growth is expected to be above-average, better than 89% of comparable companies (Obermatt Growth Rank is 89). This is a typical case. Companies with above average growth tend to cost more than stocks with slower growth expectations. If this is a high-growth company, the low Obermatt Safety Rank of 45 is a good sign. The more debt a well-performing company has, the higher the returns to shareholders. However, if growth turns negative or interest rates increase, high debt may become a burden. If you believe the future is bright for Tech Mahindra, even a low-value company (in terms of its key financial indicators) can be a good investment. Obermatt Premium subscribers can further check the stock’s Sentiment Ranks, which also flow into the Obermatt 360° View for investors. ...read more
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360° Viewnew| Country | India |
| Industry | IT Consulting & oth. Services |
| Index | BSE Sensex, Good Governace Growth Markets, CNX Nifty 50 |
| Size class | X-Large |
This stock has achievements: Top 10 Stock.
14-Nov-2024. Stock data may be delayed. Log in or sign up to get the most recent research.
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Review the performance ranks of the individual metrics that form each investment strategy.
Research History: Tech Mahindra
| RESEARCH HISTORY | 2021 | 2022 | 2023 | 2024 | ||||
|---|---|---|---|---|---|---|---|---|
| VALUE | ||||||||
| VALUE | 63 |
|
76 |
|
74 |
|
49 |
|
| GROWTH | ||||||||
| GROWTH | 88 |
|
55 |
|
31 |
|
89 |
|
| SAFETY | ||||||||
| SAFETY | 91 |
|
58 |
|
48 |
|
45 |
|
| SENTIMENT | ||||||||
| SENTIMENT | n/a |
|
38 |
|
27 |
|
new |
|
| 360° VIEW | ||||||||
| 360° VIEW | n/a |
|
63 |
|
34 |
|
new |
|
Combined financial peformance in Detail
ANALYSIS: With an Obermatt Combined Rank of 78 (better than 78% compared with investment alternatives), Tech Mahindra (IT Consulting & oth. Services, India) shares have much better financial characteristics than comparable stocks. Shares of Tech Mahindra are low in value (priced high) with a consolidated Value Rank of 49 (worse than 51% of alternatives), and are riskily financed (Safety Rank of 45, which means above-average debt burdens) but show above-average growth (Growth Rank of 89). ...read more
RECOMMENDATION: A Combined Rank of 78, is a strong buy recommendation based on Tech Mahindra's financial characteristics. As the company Tech Mahindra shows low value with an Obermatt Value Rank of 49 (51% of comparable investments are less expensive), investors should look at the other ranks. In this case, growth is expected to be above-average, better than 89% of comparable companies (Obermatt Growth Rank is 89). This is a typical case. Companies with above average growth tend to cost more than stocks with slower growth expectations. If this is a high-growth company, the low Obermatt Safety Rank of 45 is a good sign. The more debt a well-performing company has, the higher the returns to shareholders. However, if growth turns negative or interest rates increase, high debt may become a burden. If you believe the future is bright for Tech Mahindra, even a low-value company (in terms of its key financial indicators) can be a good investment. Obermatt Premium subscribers can further check the stock’s Sentiment Ranks, which also flow into the Obermatt 360° View for investors. ...read more
| RESEARCH HISTORY | 2021 | 2022 | 2023 | 2024 | ||||
|---|---|---|---|---|---|---|---|---|
| VALUE | ||||||||
| VALUE | 63 |
|
76 |
|
74 |
|
49 |
|
| GROWTH | ||||||||
| GROWTH | 88 |
|
55 |
|
31 |
|
89 |
|
| SAFETY | ||||||||
| SAFETY | 91 |
|
58 |
|
48 |
|
45 |
|
| COMBINED | ||||||||
| COMBINED | 97 |
|
73 |
|
54 |
|
78 |
|
Value Metrics in Detail
ANALYSIS: With an Obermatt Value Rank of 49 (worse than 51% compared with alternatives), Tech Mahindra shares are more expensive than the average comparable stock. The Value Rank is based on consolidating four value indicators, where half the indicators are below and half above average for Tech Mahindra. Price-to-Sales (P/S) is 55, which means that the stock price compared with what market professionals expect for future sales is lower than for 55% of comparable companies, indicating a good value concerning Tech Mahindra's revenue size. The same is valid for dividend yields with a Dividend Yield rank of 70, which means that dividends are expected to be higher than for 70% of comparable investments. On the other hand, the Price-to-Book Capital ratio (also referred to as market-to-book ratio) is less favorable than for 60% of alternatives (only 40% of peers have an even higher ratio). The same is valid for the Price-to-Profit (or Price / Earnings, P/E) ratio, which is higher than for 63% of comparable companies, making the stock more expensive compared with the company's expected profit levels. ...read more
RECOMMENDATION: The overall picture with a consolidated Value Rank of 49, is a hold recommendation based on Tech Mahindra's stock price compared with the company's operational size and dividend yields. This is a somewhat surprising picture, because it means that profits are low while dividends are high. One interpretation could be that profits are expected to increase, justifying the high dividend payments. But it could also mean that the company desperately keeps the high dividends to avoid a collapsing share price. This would be a rather dangerous constellation. We recommend further analyzing the stock with Obermatt’s Value, Safety, and Sentiment Ranks, including the 360° View, before making an investment decision, which is especially important in this case, as the financial indicators are inconclusive. ...read more
| VALUE METRICS | 2021 | 2022 | 2023 | 2024 | ||||
|---|---|---|---|---|---|---|---|---|
| PRICE VS. REVENUES (P/S) | ||||||||
| PRICE VS. REVENUES (P/S) | 46 |
|
66 |
|
62 |
|
55 |
|
| PRICE VS. PROFITS (P/E) | ||||||||
| PRICE VS. PROFITS (P/E) | 71 |
|
65 |
|
50 |
|
37 |
|
| PRICE VS. CAPITAL (Market-to-Book) | ||||||||
| PRICE VS. CAPITAL (Market-to-Book) | 19 |
|
52 |
|
50 |
|
40 |
|
| DIVIDEND YIELD | ||||||||
| DIVIDEND YIELD | 83 |
|
87 |
|
84 |
|
70 |
|
| CONSOLIDATED RANK: VALUE | ||||||||
| CONSOLIDATED RANK: VALUE | 63 |
|
76 |
|
74 |
|
49 |
|
Growth Metrics in Detail
ANALYSIS: With an Obermatt Growth Rank of 89 (better than 89% compared with alternatives) for 2024, Tech Mahindra shows one of the highest growth dynamics in its industry. Investors also speak of high momentum. The Growth Rank is based on consolidating four value indicators, with all but one indicator above average for Tech Mahindra. Profit Growth has a rank of 96 which means that currently professionals expect the company to grow its profits more than 96% of its competitors. The same is valid for capital growth and stock returns. Capital Growth has a rank of 77, and Stock Returns has a rank of 79 which means that the stock returns have recently been above 79% of alternative investments. Only revenue growth is low with a Sales Growth has a rank of 29 (71% of its competitors are better). ...read more
RECOMMENDATION: The overall picture with a consolidated Growth Rank of 89, is a buy recommendation for growth and momentum investors. The many positive growth indicators indicate a positive growth momentum with only low revenue growth. That can also be attributed to divestments or the sale of unprofitable businesses. If that is the reason, overall growth is well on track to making this stock attractive for growth investors. While momentum is a popular investment factor, the value aspect might be the more important one, in the longer term. We recommend analyzing the stock with Obermatt’s Value, Safety, and Sentiment Ranks to arrive at a 360° View of the stock purchase case. ...read more
| GROWTH METRICS | 2021 | 2022 | 2023 | 2024 | ||||
|---|---|---|---|---|---|---|---|---|
| REVENUE GROWTH | ||||||||
| REVENUE GROWTH | 40 |
|
27 |
|
17 |
|
29 |
|
| PROFIT GROWTH | ||||||||
| PROFIT GROWTH | 37 |
|
53 |
|
4 |
|
96 |
|
| CAPITAL GROWTH | ||||||||
| CAPITAL GROWTH | n/a |
|
34 |
|
78 |
|
77 |
|
| STOCK RETURNS | ||||||||
| STOCK RETURNS | 92 |
|
87 |
|
65 |
|
79 |
|
| CONSOLIDATED RANK: GROWTH | ||||||||
| CONSOLIDATED RANK: GROWTH | 88 |
|
55 |
|
31 |
|
89 |
|
Safety Metrics in Detail
ANALYSIS: With an Obermatt Safety Rank of 45 (better than 45% compared with alternatives), the company Tech Mahindra has financing practices on the riskier side, which means that their overall debt burden is above the industry average. This doesn't mean that the business of Tech Mahindra is also risky, it only means that the company is on the riskier side in respect to bankruptcy in case things turn sour, assuming that public reporting is correct. The Safety Rank is based on consolidating three financing indicators, with two out of three indicators above average for Tech Mahindra. Leverage is at a rank of 56, meaning the company has a below-average debt-to-equity ratio. It has less debt than 56% of its competitors. Liquidity is also good at a rank of 70, meaning the company generates more profit to service its debt than 70% of its competitors. This indicates that the company is on the safer side when it comes to debt service. But Refinancing is lower at a rank of 33, which means that the portion of the debt that is about to be refinanced is above-average. It has more debt in the refinancing stage than 67% of its competitors. ...read more
RECOMMENDATION: With a consolidated Safety Rank of 45 (worse than 55% compared with alternatives), Tech Mahindra has a financing structure that is riskier than that of its competitors. The refinancing issues could be a short-term problem, especially if the company has reputation issues. Banks and investors don't like to refinance debt if there are clouds on the horizon. For this reason, investors should look at the refinancing environment for Tech Mahindra. Does it look safe that debt that is coming due can be covered with new debt? If that is the case, then the financing situation of the company is on the safer side. If not, it may be better to wait until refinancing has been completed and the Refinancing rank is good again. Investors may have a short-term debt challenge with Tech Mahindra and should also compare Obermatt’s Value, Growth, and Sentiment Ranks before making a decision. ...read more
| SAFETY METRICS | 2021 | 2022 | 2023 | 2024 | ||||
|---|---|---|---|---|---|---|---|---|
| LEVERAGE | ||||||||
| LEVERAGE | 58 |
|
56 |
|
56 |
|
56 |
|
| REFINANCING | ||||||||
| REFINANCING | 52 |
|
50 |
|
42 |
|
33 |
|
| LIQUIDITY | ||||||||
| LIQUIDITY | 97 |
|
64 |
|
54 |
|
70 |
|
| CONSOLIDATED RANK: SAFETY | ||||||||
| CONSOLIDATED RANK: SAFETY | 91 |
|
58 |
|
48 |
|
45 |
|
Sentiment Metrics in Detail
| SENTIMENT | 2021 | 2022 | 2023 | 2024 | ||||
|---|---|---|---|---|---|---|---|---|
| ANALYST OPINIONS | ||||||||
| ANALYST OPINIONS | n/a |
|
85 |
|
18 |
|
new |
|
| OPINIONS CHANGE | ||||||||
| OPINIONS CHANGE | n/a |
|
22 |
|
39 |
|
new |
|
| PRO HOLDINGS | ||||||||
| PRO HOLDINGS | n/a |
|
10 |
|
79 |
|
new |
|
| MARKET PULSE | ||||||||
| MARKET PULSE | n/a |
|
59 |
|
40 |
|
new |
|
| CONSOLIDATED RANK: SENTIMENT | ||||||||
| CONSOLIDATED RANK: SENTIMENT | n/a |
|
38 |
|
27 |
|
new |
|
Free stock analysis by the purely fact based Obermatt Method for Tech Mahindra from November 14, 2024.
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