Mercury EV-Tech Ltd and Tech Mahindra Ltd: A Comparative Stock Analysis

Share Price Snapshot

• As of late October 2025, Mercury EV-Tech’s share price was around ₹ 42.21. Groww+2icicidirect.com+2

• The company’s 52-week high was ~ ₹ 118.70, and the 52-week low ~ ₹ 39.20. icicidirect.com+2icicidirect.com+2

• The price has declined significantly over the past year (decline of ~58.5% over one year). icicidirect.com+1

• Valuation metrics: PE ratio ~ 84.42; P/B ratio ~ 2.90. icicidirect.com+2Groww+2

Business Profile & Strategy

• Mercury EV-Tech describes itself as an “end to end EV solution provider” in India: it not only manufactures electric vehicles (2W, 3W, e-buses, loaders) but also key components such as batteries, chassis, motor-controllers, and owns a CED (cationic electro-deposition) coating plant. mercuryevtech.com+2mercuryevtech.com+2

• The firm says it aims to support India’s push for self-reliance (“Atmanirbhar Bharat”) in EV manufacturing by localising production of components. mercuryevtech.com+1

• Incorporated in 1986, formerly known as Mercury Metals, the company changed name to Mercury EV-Tech. Investing.com India

Strengths

• Appeal of EV sector: being in the electric mobility ecosystem gives it a thematic alignment with structural trends (electrification of transport, domestic manufacturing push).

• Component manufacturing + vehicle manufacturing gives it the potential for vertical integration (if executed well).

• Low debt: one platform indicates debt to equity is very low (~0.02) for the firm. Groww+1

Risks & Weaknesses

• Strong share price decline: the large drop from its 52-week high suggests that investor expectations may have already been disappointed, or risk perception has increased.

• Low returns: The ROE (return on equity) and ROCE (return on capital) are relatively low (ROE ~4.4% over 3 years). screener.in+1

• Very high PE: With PE ~84, the valuation is high relative to (in my view) the current earnings performance. Markets often demand growth for such valuations.

• Execution risk: Involvement in many sub-segments (2W/3W/EV buses/scooters + components) increases complexity. Localising components, scaling manufacturing, and capturing market share are non-trivial.

• Sector/market risk: The EV component manufacturing space is competitive; cost pressures, technology shifts, subsidy changes, or supply-chain disruptions are possible.

• Small/SME risk: Relative to large diversified players, smaller firms often carry higher risk in terms of cash flows, margin stability and scale.

Strategic Outlook

In my view, the key things to watch for Mercury EV-Tech are:

• Whether the order book (especially for battery systems/components) starts to scale meaningfully. Some sources mention the company received a battery order worth ~₹110 cr. Groww

• Whether the company can convert that into manufacturing throughput, manage margin erosion (from competition or input cost inflation) and avoid inventory/debtor pitfalls.

• Financial discipline: improvement in ROE/ROCE would be a positive.

• Market share in the segments it competes in (2-W, 3-W, component supply) and how government policy supports or hinders (subsidies, localisation norms).

• The broad market sentiment: given the steep drop in share price, some of the risk may already be priced in — but that also means better upside requires positive surprises.

My Summary

Mercury EV-Tech is a high-risk, potentially high-reward play in the Indian EV/clean mobility space. If everything goes right (scaling orders, capturing localisation, improving margins), there is meaningful upside. But the execution challenges, competitive pressures and current performance metrics suggest caution. For a long-term investor comfortable with volatility and thematic bets, it might warrant attention. For someone seeking stable returns, the risk is comparatively higher.

Tech Mahindra Ltd

Share Price Snapshot

• As of late October 2025, Tech Mahindra’s share price is around ₹ 1,453.70. Groww+1

• 52-week high ~ ₹ 1,807.70; 52-week low ~ ₹ 1,209.40. INDmoney+1

• Valuation metrics: P/E in the low 30s (~31.3) and P/B ~5.3. Moneycontrol+1

• Dividend yield ~3.1%. Groww+1

Business Profile & Strategy

• Tech Mahindra is a major Indian information‐technology services and consulting company, part of the Mahindra Group. Tech Mahindra | Scale at Speed+1

• The firm operates in over 90 countries, offering consulting, digital transformation, application services, infrastructure, engineering services, cloud / analytics / cybersecurity etc. Tech Mahindra | Scale at Speed+1

• The company has been executing a turnaround plan aimed at improving revenue growth and margins. Reuters+1

Strengths

• Diversified services portfolio: across industries (BFSI, telecom, healthcare, energy & utilities etc.) and geographies. This reduces dependency on a single vertical.

• Strong brand and scale: being a large player means scale efficiencies, client relationships, global presence.

• Dividend yield is respectable for a services company (~3%) which may appeal to income-oriented investors.

• Margins show improvement potential; the company has explicitly laid out a plan to improve operating margin. Reuters+1

Risks & Weaknesses

• Growth pressure: The IT services sector globally is facing headwinds from slower client spending, especially in telecom or discretionary IT. For example, in Q3 the company missed revenue due to telecom weakness. Reuters

• Interest rate / macro risk: If global economic growth slows, IT spending often gets delayed.

• Valuation risk: With P/E in the low 30s, some of the growth may already be priced in; disappointments could lead to downside.

• Competition: Global IT services is crowded; margin pressure from offshore peers, automation and cost optimisation could compress margins.

• Dependence on verticals: While diversified, sectors such as telecom have been under pressure (for TechMahindra especially), which can impact performance.

Strategic Outlook

Key things to watch:

• Order wins and deal pipeline: are new client contracts being signed and executed well? The doubling of order bookings in one quarter was a positive sign. Reuters

• Margin improvement: whether the company can convert strategic plan into operational improvements and deliver higher operating margin.

• Sectoral/phasing exposure: how the company navigates weaker telecom business while scaling in faster-growing sectors like BFSI, healthcare, cloud/infrastructure.

• Impact of global macro: currency, inflation, labour cost pressures, client budgets.

• Dividend and cash flow: For income investors, stable/ growing dividend and free cash flow are important.

My Summary

Tech Mahindra is a relatively lower-risk, more stable play compared to a small niche firm. It has scale, reasonable dividend yield, and a clear strategy. However, the upside may be more modest and dependent on improving growth momentum and margin expansion. If you believe in the broader digital / outsourcing services trend and are fine with moderate risk, this could be a core portfolio candidate.

Comparative View & What an Investor Might Consider

Here is how you might compare the two:

Investor scenarios:

• If you are comfortable with higher risk and seek a potential high growth theme (EVs, localisation) and have a long time horizon, you may allocate a smaller portion to Mercury EV-Tech.

• If you prefer a more stable allocation and want exposure to a large Indian company with global reach, Tech Mahindra may fit better for your core allocation.

• If you already own one or the other, consider whether you want diversified exposure (both a niche growth play + a larger stable one) vs concentrating.

Final Thoughts

While the share prices and valuation metrics above provide a snapshot, remember that investing in stocks requires careful consideration of many factors beyond just the numbers: management quality, competitive advantages (or lack thereof), sector outlook, global macro factors, risk appetite, and time horizon. Neither company is without risk, but each offers different profiles for different investor types.