Hi All,
I would add few points here:
In IT services, though most of the companies do similar work more or less, the pricing power varies from company to company. TCS has always maintained OPM of 26% to 28% post 2015, where as TechM has maintained OPM of 15% to 18% post 2015. This is partially due to large portion of TechM work being Maintenance & Support and BPO apart from some Development, Design and Automation work.
Due to this difference, TCS may trade between P/E of 20-35 but TechM may find it difficult to fetch P/E of more than 20.
TechM has traded even at P/E of 11-15 for most of the time during past decade. There have been large acquisitions by TechM in the past which has impacted their margins severely.
I will prefer TCS & Infosys only in IT services space as a part of long term portfolio, and other IT services companies are good for short term holding only (2-3 years). This is my personal opinion.
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