Tech Mahindra Ltd.
ISIN: INE669C01036 • Market Cap: ₹1.55 Lakh Cr
The 5-Pillar Quality Audit for Tech Mahindra Ltd.
Evaluated across Profitability, Financial Health, Historical Compounding, Valuation Safety, and Ownership Governance:
1. Profitability & Capital Efficiency
Weight: 25%Measures operating margins (16.6%), Return on Capital Employed (22.0%), and equity compounding (15.6%).
2. Financial Health & Solvency
Weight: 25%Debt-to-Equity is 0.00 with comfortable interest coverage and clean working capital.
3. Growth & Compounding Track Record
Weight: 20%Historical 3Y Sales CAGR (4.4%) and 3Y PAT CAGR (29.9%).
4. Valuation Multiple & Margin of Safety
Weight: 15%Trades at P/E of 30.20 vs PEG of 3.43 and Dividend Yield of 3.2%.
5. Ownership Quality & Governance
Weight: 15%Promoter holding stands at 35.0%, backed by 55.7% institutional ownership.
Key Fundamental Strengths
Superior Capital Efficiency (ROCE: 22.0%)
Tech Mahindra Ltd. generates exceptional return on capital employed of 22.0%, reflecting pricing power and competitive moat.
Fortress Balance Sheet (D/E: 0.00)
The company operates virtually debt-free, shielding net margins from interest rate cycles and monetary tightening.
High-Velocity Profit Compounding (3Y PAT CAGR: 29.9%)
Net earnings have compounded at 29.9% annualized, demonstrating operating leverage.
Deep Institutional Sponsorship (55.7%)
Mutual funds, domestic DIIs, and foreign FIIs hold 55.7%, providing strong governance scrutiny.
Areas to Watch & Potential Risks
Topline Stagnation (3Y Sales CAGR: 4.4%)
Revenue growth has slowed below inflation rates, indicating cyclical demand slowdown or saturated core markets.
Sectoral & Macro Headwinds (Information Technology)
Subject to broader cyclical demand, raw material price shifts, and regulatory frameworks governing the Information Technology space.
Quantitative Strategy Eligibility
Checking TECHM against established Indian wealth creation frameworks:
Coffee Can Investing Framework
Fails 10%+ revenue growth or 15%+ minimum capital return benchmark over historical periods.
Quality Factor Screener (High RoIC + Low Debt)
Qualifies for Indian Quality Indices with overall score of 75/100 and clean gearing.
GARP / Value-Growth Blend
Valuation multiple or return metrics require further cyclical pullback.
Information Technology Sector Peer Comparison
Compare TECHM directly against top industry peers by market capitalization:
| Company | 5-Pillar Score | Market Cap | P/E | ROCE | D/E | Scorecard |
|---|---|---|---|---|---|---|
| Tech Mahindra Ltd. (TECHM)Current | 75/100 | ₹1.55 Lakh Cr | 30.20 | 22.0% | 0.00 | — |
| Tata Consultancy Services Ltd. (TCS) | 79/100 | ₹8.27 Lakh Cr | 16.62 | 60.9% | 0.00 | View |
| Infosys Ltd. (INFY) | 78/100 | ₹4.53 Lakh Cr | 14.97 | 41.1% | 0.00 | View |
| HCL Technologies Ltd. (HCLTECH) | 75/100 | ₹3.59 Lakh Cr | 20.60 | 28.7% | 0.00 | View |
| Wipro Ltd. (WIPRO) | 71/100 | ₹1.78 Lakh Cr | 13.45 | 18.7% | 0.19 | View |
| LTM Ltd. (LTM) | 77/100 | ₹1.35 Lakh Cr | 25.72 | 28.7% | 0.00 | View |
Frequently Asked Questions: Tech Mahindra Ltd.
Q:What is the 5-Pillar Fundamental Score for Tech Mahindra Ltd. (TECHM)?
Tech Mahindra Ltd. has a RupeeTools Fundamental Score of 75/100, placing it in the 'Solid & Healthy' category. Its pillar scores are: Profitability (77/100), Financial Health (89/100), Growth (64/100), Valuation (65/100), and Ownership Quality (72/100).
Q:Is TECHM fundamentally strong for long-term investment?
Yes, TECHM exhibits solid fundamental strength with a 75/100 score, driven by a return on equity of 15.6% and a debt-to-equity ratio of 0.00.
Q:Does TECHM pass the Coffee Can Investing filter?
No. TECHM does not currently meet the strict 15% ROCE and 10% sustained topline compounding threshold mandated by the Coffee Can investing framework.
Q:How does TECHM compare against other Information Technology peers?
Within India's Information Technology sector, TECHM trades at a P/E of 30.20 and generates an ROCE of 22.0%. Compare its 5-Pillar score of 75/100 against top sector peers like Tata Consultancy Services Ltd. (79/100), Infosys Ltd. (78/100).
Regulatory & SEBI Research Analyst Compliance Disclaimer:
This 5-pillar fundamental score is an automated quantitative health check generated purely from historical public financial statements, corporate filings, and exchange disclosures for educational and informational purposes only. It does NOT constitute investment advice, a stock recommendation, or a solicitation to buy or sell securities. RupeeTools is not a SEBI-registered Research Analyst. Please consult a SEBI-registered financial advisor before making investment decisions.