In a market where information technology stocks traditionally command premium valuations, savvy investors are turning their attention to an overlooked segment: IT companies trading below the industry’s price-to-earnings (P/E) ratio.
Recent data from Simplywall st reveals the IT sector currently trades at a P/E of 44.2x, notably higher than its three-year average of 38.4x. This valuation gap has created a unique window for value investors seeking quality technology exposure at reasonable prices.
This divergence in valuations comes at a time when technology remains a critical driver of global economic growth, making the sector increasingly attractive for long-term investors seeking both value and growth potential.
1. Tata Consultancy Services (TCS)
TCS has stood as a global powerhouse in IT services and business solutions since its establishment in 1968. Furthermore, this Mumbai-based technology leader operates across 150 locations in 46 countries, employing over 600,000 professionals worldwide. Meanwhile, as part of the prestigious Tata Group, TCS continues to shape the future of digital transformation and innovation.
TCS currently trades at a P/E of 31.66. Revenue from operations has increased by 6.84 percent from Rs. 2,25,458 crore in FY23 to Rs. 2,40,893 crore in FY24. The company’s net profit has increased from Rs. 42,303 crore in FY23 to Rs. 46,099 crore in FY24, which has grown by 8.97 percent.
With a market capitalisation of Rs. 14,96,369 crores, TCS Limited’s share price currently trades at Rs. 4,136 per equity share.
2. Infosys Limited
Infosys emerges as a trailblazer in digital services and consulting since its founding in 1981 by N.R. Narayana Murthy. Moreover, this Bangalore-based technology giant employs over 317,000 professionals globally, delivering innovative solutions across multiple industries. Meanwhile, their commitment to digital transformation has positioned them as a trusted partner for businesses worldwide.
Infosys currently trades at a P/E of 28.08. Revenue from operations has increased by 4.7 percent from Rs. 1,46,767 crore in FY23 to Rs. 1,53,670 crore in FY24. The company’s net profit has increased from Rs. 24,108 crore in FY23 to Rs. 26,248 crore in FY24, which has grown by 8.87 percent.
With a market capitalisation of Rs. 7,57,352 crores, Infosys Limited’s share price currently trades at Rs. 1,824 per equity share.
3. HCL Technologies
HCL has established itself as a formidable force in global IT services since its inception in 1991 by Shiv Nadar. Moreover, under the leadership of CEO C. Vijayakumar and Chairperson Roshni Nadar Malhotra, the company employs over 223,000 professionals across 60 countries. Meanwhile, their extensive network of 210 global delivery centres demonstrates their commitment to worldwide technological excellence.
HCL Tech currently trades at a P/E of 29.76. Revenue from operations has increased by 8.33 percent from Rs. 1,01,456 crore in FY23 to Rs. 1,09,913 crore in FY24. The company’s net profit has increased from Rs. 14,845 crore in FY23 to Rs. 15,710 crore in FY24, which has grown by 5.82 percent.
With a market capitalisation of Rs. 5,00,386 crores, HCL Tech Limited’s share price currently trades at Rs. 1,844 per equity share.
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4. Wipro Limited
Wipro exemplifies remarkable transformation since its establishment in 1945, evolving from a vegetable oil manufacturer to a global technology powerhouse. Furthermore, under Rishad Premji’s leadership, this Bangalore-based company employs over 250,000 professionals across 66 countries. Meanwhile, their journey represents one of India’s most inspiring corporate evolution stories.
Wipro currently trades at a P/E of 25.10. Revenue from operations has declined by 0.8 percent from Rs. 90,488 crore in FY23 to Rs. 89,760 crore in FY24. The company’s net profit has declined from Rs. 11,366 crore in FY23 to Rs. 11,112 crore in FY24, which has decreased by 2.23 percent.
With a market capitalisation of Rs. 2,93,912 crores, Wipro Limited’s share price currently trades at Rs. 562 per equity share.
5. Mphasis Limited
Mphasis has stood as a dynamic force in global technology services since its establishment in 1992. Moreover, this Bengaluru-based company employs over 24,500 professionals worldwide, delivering innovative cloud and cognitive solutions across multiple industries. Meanwhile, their strategic presence in key markets like the United States, Germany, and Australia strengthens their global reach.
Mphasis currently trades at a P/E of 34.68. Revenue from operations has declined by 3.76 percent from Rs. 13,798 crore in FY23 to Rs. 13,279 crore in FY24. The company’s net profit has declined from Rs. 1,638 crore in FY23 to Rs. 1,555 crore in FY24, which has decreased by 5 percent.
With a market capitalisation of Rs. 54,919 crores, Mphasis Limited’s share price currently trades at Rs. 2,902 per equity share.
Written By Fazal Ul Vahab C H
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