LTIMindtree nosedives in intra-day trade, brokerage show optimism; check target levels and recommendations

LTIMindtree nosedives in intra-day trade, brokerage show optimism; check target levels and recommendations

LTIMindtree’s share price fell 1.04% to Rs 5,401 during the intra-day on Friday. Despite today’s downfall in the stock price of the company, the brokerage houses have shown optimism on the stock. The share price, however, surged nearly 6% yesterday on the news of the company’s earnings in Q2. LTIMindtree, the sixth-largest IT services firm, on Wednesday, reported a sequential rise of less than 1% in its net profit to Rs 1,162 crore for the second quarter, mainly due to a muted revenue growth and the impact of wage hikes carried out during the quarter.Let’s delve into the calls of some of prominent brokerage houses-Jefferies: Hold – Target Price: Rs 5,575

“LTIMindtree’s 2Q results beat estimates with both revenues and margins surprising positively. Management expects a pick-up in growth across several verticals led by timely deal ramp-ups. A strong 20% YoY growth in deal wins, headcount additions after three straight quarters of decline offers comfort on 2H being better than 1H. We raise our estimates by 1-5% and expect LTIMindtree to deliver 20% EPS CAGR over FY24-26. We raise our Target Price to Rs 5,575 and upgrade LTIMindtree to ‘Hold’.”

Anand Rathi: Buy – Target Price: Rs 6,010

“LTIMindtree had a relatively strong Q2, with 1.6% sequential growth and TCV wins of $1.3bn, up 20% y/y. Growth was broad based across sectors barring BFSI, which declined sequentially. Hi-Tech also grew. Book-to-bill was 1.2x (LTM average 1.3x), suggesting on-time ramp-ups. Q2 EBIT margin declined 70bps q/q, 152bps y/y, to 16%, on wage hikes and resumption of hiring. Estimates largely unchanged; target tweaked to Rs 6,010 (from Rs 6,060) 26x FY26e (rolled forward). We maintain a ‘Buy’.”

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