The simplest way to understand this comparison is through two axes.

This distinction between level and rate of change matters.

A company with a 21% margin that stays flat can still have better economics than one whose margin rises 330 basis points but only reaches 14.4%.

At the same time, the lower-margin company can produce faster profit growth precisely because it has more room to improve.

For Bull Run's underlying company research, see Infosys, Tech Mahindra, How to Analyse IT Services Stocks, TCS vs Infosys and Tech Mahindra vs Wipro.

Q1 FY27 comparison

Tech Mahindra wins the Q1 growth race clearly

Tech Mahindra revenue grew:

• 6.6% year on year in constant currency,
• 2.6% sequentially in constant currency.

Infosys grew:

• 2.4% year on year,
• 1.0% sequentially.

This is a meaningful difference.

Tech Mahindra is no longer only a cost-reduction turnaround.

Growth has returned.

Management also said all verticals delivered year-on-year growth.

Infosys still produces more absolute incremental revenue

Infosys is approximately three times larger.

A 2.4% growth rate on a $5-billion-plus quarterly revenue base can represent substantial absolute dollars.

Therefore:

Tech Mahindra has better percentage growth.

But that does not automatically mean it adds more revenue dollars.

Investors should always distinguish rate from denominator.

The margin comparison points the other way

Tech Mahindra's improvement is impressive.

Its EBIT increased approximately 53.3% in rupees while revenue increased 17.7%.

That shows strong operating leverage.

But 14.4% is still far below Infosys's 21.1%.

Why the level-versus-change distinction matters for valuation

Imagine two businesses.

Business A earns a 21% margin and grows it to 21.5%.

Business B earns an 11% margin and grows it to 14%.

Business B can produce far faster near-term earnings growth.

Business A may still be structurally more profitable.

This is almost exactly the current Infosys-versus-Tech-Mahindra setup.

The market can rationally pay Tech Mahindra a higher P/E if it believes margin convergence will continue.

The risk is that the valuation premium remains even after easy cost improvements have already been captured.

Infosys's large-deal engine remained strong

Infosys reported $3.6 billion of large-deal TCV.

Approximately 61% was net new.

A simple analytical multiplication implies around $2.2 billion of net-new large-deal TCV.

That calculation is not a separately reported company number.

The 61% net-new share matters because renewals are economically different from entirely new workload.

A renewal protects existing revenue.

A net-new contract creates a clearer path to incremental revenue.

Tech Mahindra has now delivered three consecutive $1-billion-plus deal-win quarters

Q1 new deal wins reached approximately $1.078 billion.

That increased about 33% year on year.

Management highlighted this as the third consecutive quarter above $1 billion.

Consistency matters more than one record quarter.

Three strong periods suggest the sales engine has genuinely improved.

But Infosys and Tech Mahindra do not define headline deal metrics identically

Infosys reports large-deal TCV.

Tech Mahindra reports new deal wins TCV.

The threshold and classification methodology are company-specific.

Therefore:

$3.6 billion divided by $1.078 billion

does not prove Infosys has exactly 3.3 times Tech Mahindra's sales productivity.

It simply confirms Infosys has a larger absolute disclosed large-deal engine.

Bookings only matter when they move through the conversion chain

Infosys is now quantifying AI as a percentage of revenue

Infosys reported that AI represented approximately 8.2% of Q1 revenue.

Quarterly revenue was $5.082 billion.

A simple analytical calculation gives:

$5.082 billion × 8.2% ≈ $417 million of quarterly AI-attributed revenue.

Annualising that quarterly calculation gives roughly $1.67 billion.

Neither $417 million nor $1.67 billion is a separately reported company number.

They are mathematical translations of the company's disclosed 8.2% revenue share.

Infosys's AI disclosure has improved materially

Infosys is positioning Topaz across:

• application modernisation,
• cloud operations,
• software engineering,
• financial crime,
• healthcare,
• network engineering,
• enterprise productivity.

Q1 client activity included work with major enterprises across automotive, banking, telecom, semiconductor, healthcare and food manufacturing.

The company also expanded collaboration with OpenAI around enterprise use of Codex.

The strategic signal is important:

AI is moving from isolated proof-of-concepts into existing multi-year enterprise technology contracts.

Tech Mahindra's AI proposition is more domain-led

Tech Mahindra highlighted investments in:

• domain-specific AI,
• sovereign AI,
• agentic development,
• AIOps,
• network digital twins,
• AI-enabled product engineering.

Its telecom heritage can be an advantage here.

Network operations produce enormous amounts of real-time data.

AI can be used for:

• network optimisation,
• fault prediction,
• customer-service automation,
• fraud detection,
• capacity planning,
• software-defined network management.

Tech Mahindra therefore has differentiated AI opportunity even without a standalone AI-revenue percentage.

Infosys wins on measurable AI monetisation today

Infosys's FY27 guidance remains conservative

Infosys guided for:

• 1.5% to 3.0% FY27 constant-currency revenue growth,
• 20% to 22% operating margin.

This guidance is useful because it prevents investors from annualising one strong deal quarter into unrealistic revenue assumptions.

$3.6 billion of large deals does not mean Infosys suddenly expects double-digit full-year growth.

Large contracts ramp over time.

Tech Mahindra does not provide an identical full-year guidance framework

Therefore comparing Infosys's 1.5–3.0% guidance with an invented Tech Mahindra number would be inappropriate.

The better Tech Mahindra indicators are:

• 6.6% current CC growth,
• three consecutive $1-billion-plus deal quarters,
• 14.4% EBIT margin,
• 330-bps YoY margin improvement.

Infosys cash generation was exceptional

Free cash flow reached approximately:

$0.96 billion / ₹9,051 crore.

FCF conversion was 116.4% of net profit.

This means Infosys generated more free cash during the quarter than accounting net profit.

For an IT-services company, high FCF conversion supports:

• dividends,
• buybacks,
• AI investments,
• acquisitions,
• balance-sheet flexibility.

Tech Mahindra's cash conversion was strong too

Tech Mahindra reported:

• free cash flow of $167 million,
• USD PAT of $154 million.

Dividing FCF by PAT gives an analytical conversion ratio of approximately 108%.

This is not an official company-labelled percentage.

It nevertheless confirms that the turnaround is producing real cash rather than only accounting profit.

Cash conversion reduces turnaround risk

A company can show improving EBIT while receivables consume cash.

Tech Mahindra's Q1 does not show that problem.

Its days sales outstanding stood around 84 days and free cash flow exceeded PAT.

This gives management greater flexibility to continue investing in AI and talent without stretching the balance sheet.

Infosys remains the more efficient shareholder-capital machine

Bull Run's latest financial database showed:

• Infosys ROE around 31.2%,
• Tech Mahindra ROE around 16.9%.

Infosys therefore currently produces almost twice as much profit per rupee of shareholder equity.

This gap is consistent with its higher operating margin.

Tech Mahindra's opportunity is ROE convergence

If Tech Mahindra:

• grows revenue mid-single digits or better,
• moves EBIT margin toward 16–17%,
• maintains strong cash conversion,
• limits acquisition-related dilution,

ROE can rise substantially.

That future improvement is a major reason the stock can command a premium multiple despite weaker current profitability.

Infosys is more diversified by client and vertical mix

Infosys serves large clients across:

• financial services,
• manufacturing,
• retail,
• communications,
• energy,
• healthcare,
• technology.

Tech Mahindra has been diversifying but retains a much stronger historical association with communications and telecom.

That creates both:

a domain moat and a concentration risk.

Tech Mahindra's diversification is improving

Management said all verticals grew year on year in Q1.

Important new wins included:

• payments,
• US healthcare,
• aerospace and defence,
• telecom cloud.

The company also acquired Avant Techno Solutions to deepen payments-modernisation and wealth-platform capabilities.

If BFSI, healthcare and manufacturing grow faster than communications over several years, Tech Mahindra's earnings profile should become less cyclical.

Valuation is where Infosys becomes particularly interesting

Tech Mahindra traded at roughly 1.9 times Infosys's earnings multiple.

Yet Infosys currently has:

• higher operating margin,
• higher ROE,
• greater scale,
• higher absolute free cash flow,
• clearer AI revenue disclosure.

The premium therefore rests almost entirely on future rate of improvement.

Why Tech Mahindra's P/E can rationally be higher

Trailing P/E divides current price by current earnings.

If current earnings are still below normalised turnaround potential, the ratio can look expensive immediately before profit expands.

Tech Mahindra's 330-bps margin improvement demonstrates this mechanism.

As margin rises, EPS can grow much faster than revenue.

The question is how much improvement remains after Q1.

Why the premium also creates risk

At roughly 28x current earnings, Tech Mahindra needs continued execution.

If:

• CC growth drops back toward 2%,
• margin stalls around 14–15%,
• large deal conversion slows,

the earnings denominator may not grow fast enough to justify the premium.

Infosys's approximately 15x valuation requires much less operating improvement.

Infosys's raw Bull Run stock-data price needs a data-quality note

The underlying Bull Run database currently contains an ADR-like $12.06 value in one raw Infosys price field while the public Bull Run Indian stock page correctly shows the NSE/BSE share near ₹1,144 on August 25.

The raw field is therefore clearly contaminated by the US ADR price feed.

This article does not use that $12.06 field for Indian valuation or return calculations.

Fresh INR market data through August 31 is used instead.

The underlying financial ratios such as ROE are independently retained where they remain economically coherent.

Infosys vs Tech Mahindra: category-by-category

Which is stronger in 2026?

Infosys currently has the stronger risk-adjusted setup.

It combines:

• a 21.1% operating margin,
• 31%+ ROE,
• $3.6 billion of large deals,
• AI at 8.2% of revenue,
• 116% FCF conversion,
• a roughly 15x current P/E.

Tech Mahindra currently has the stronger turnaround momentum.

It combines:

• 6.6% CC growth,
• 330-bps margin expansion,
• 28.4% rupee PAT growth,
• three consecutive $1-billion-plus new-deal quarters,
• strong free cash flow.

The issue is price.

Investors are paying nearly twice Infosys's current earnings multiple for Tech Mahindra's future improvement.

That can work if margin and growth continue converging upward.

It creates more downside if the turnaround plateaus.

The current comparison is therefore:

Infosys = slower growth, superior current economics, clearer AI monetisation and cheaper valuation.

Tech Mahindra = faster growth and genuine margin recovery, but with much more improvement already embedded in the valuation.

What to monitor next

• Infosys FY27 CC guidance: delivery within or above 1.5–3.0% is the near-term growth test.
• Infosys AI revenue share: watch whether 8.2% continues increasing.
• Infosys large-deal net-new share: new workload is more valuable for growth than simple renewal TCV.
• Infosys operating margin: management's 20–22% guidance remains an important quality anchor.
• Infosys FCF conversion: continued 100%+ conversion strengthens capital returns.
• Tech Mahindra EBIT margin: the most important turnaround metric.
• Tech Mahindra CC growth: needs to remain above large-cap peers to support the valuation premium.
• Tech Mahindra $1B+ deal streak: watch whether Q2 extends it.
• Tech Mahindra AI monetisation: more quantitative disclosure would improve comparability.
• Tech Mahindra vertical diversification: less dependence on telecom would improve earnings resilience.

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