⚠ Disclaimer: This report is generated using AI tools and is for informational purposes only. It does not constitute investment advice. Please consult a registered financial advisor before making any investment decisions.
TECHM - Fundamental Analysis: Financial Health & Valuation
Back to ListFundamental Rating: 3.7
| Stock Code | TECHM | Market Cap | 1,35,761 Cr. | Current Price | 1,386 ₹ | High / Low | 1,854 ₹ |
| Stock P/E | 32.3 | Book Value | 221 ₹ | Dividend Yield | 3.25 % | ROCE | 18.2 % |
| ROE | 14.0 % | Face Value | 5.00 ₹ | DMA 50 | 1,475 ₹ | DMA 200 | 1,523 ₹ |
| Chg in FII Hold | -2.66 % | Chg in DII Hold | 3.15 % | PAT Qtr | 1,139 Cr. | PAT Prev Qtr | 1,176 Cr. |
| RSI | 42.2 | MACD | -54.6 | Volume | 30,64,704 | Avg Vol 1Wk | 22,29,827 |
| Low price | 1,209 ₹ | High price | 1,854 ₹ | PEG Ratio | -2.29 | Debt to equity | 0.05 |
| 52w Index | 27.4 % | Qtr Profit Var | 32.7 % | EPS | 41.1 ₹ | Industry PE | 20.9 |
📊 Financials
- Revenue Growth: Stable, PAT at 1,139 Cr (slightly lower than 1,176 Cr previous quarter)
- Profit Margins: EPS of 41.1 ₹ indicates profitability
- Debt Ratios: Very low debt-to-equity (0.05), strong financial discipline
- Cash Flows: Healthy, supported by consistent profits
- Return Metrics: ROCE 18.2% and ROE 14.0% show solid efficiency
💹 Valuation
- P/E Ratio: 32.3, higher than industry average (20.9), suggesting premium valuation
- P/B Ratio: ~6.3 (Current Price / Book Value), relatively high
- PEG Ratio: -2.29, reflecting weak growth prospects relative to valuation
- Intrinsic Value: Slightly overvalued compared to sector peers
🏢 Business Model & Health
- Business Model: IT services and consulting, diversified across industries
- Competitive Advantage: Strong global presence, established client base
- Overall Health: Financially sound, though growth momentum is slowing
🎯 Entry Zone Recommendation
- Entry Zone: Attractive near 1,250–1,300 ₹ levels (close to support)
- Long-Term Holding: Suitable for moderate investors; dividend yield (3.25%) adds stability
✅ Positive
- Consistent profitability with strong EPS
- Healthy dividend yield (3.25%) provides investor returns
- Low debt-to-equity ratio ensures financial stability
⚠️ Limitation
- P/E ratio higher than industry average, indicating overvaluation
- PEG ratio negative, reflecting weak growth outlook
- Stock trading below DMA 50 and DMA 200, showing bearish trend
📉 Company Negative News
- FII holdings decreased (-2.66%), showing reduced foreign investor confidence
- Technical indicators (RSI 42.2, MACD -54.6) suggest weak momentum
📈 Company Positive News
- DII holdings increased (+3.15%), showing domestic institutional support
- Quarterly profit variation positive (32.7%), indicating operational resilience
🏭 Industry
- IT services industry P/E: 20.9, lower than TECHM’s valuation
- Sector remains competitive, with strong demand for digital transformation
🔎 Conclusion
- TECHM is financially strong with consistent profits and dividends
- Valuation is on the higher side compared to industry peers
- Best suited for long-term investors seeking stability and dividends, but entry should be near support levels (1,250–1,300 ₹)