Mindtree slumped over 12 per cent on Wednesday after the stock turned ex-bonus in the ratio of 1:1. The selloff in Mindtree is not related to the bonus issue, which was announced in January, traders said.
What's weighing on Mindtree is the profit warning the company came out with on Monday. Bengaluru-based Mindtree expects "marginal" revenue growth in the current March quarter, while its operating margins are likely to dip, according to the company's statement on the Bombay Stock Exchange. (Read the full story here)
Domestic brokerage Religare today cut Mindtree to "sell" citing the company's Q4 warning and high valuations.
"Given high expectations and a weak tech spending outlook for global BFSI (banking, financial services and insurance) companies, we believe Mindtree will be unable to meet consensus forecasts," the brokerage said.
Rumit Dugar and Saumya Shrivastava of Religare said Mindtree trades at 17 times its FY18 earnings per share, which is a premium to the sector and to large-caps.
Mindtree shares closed 11.5 per cent lower at Rs 684.3 as compared to 0.57 per cent gain in the broader IT sub-index on the Bombay Stock Exchange.
Mindtree has also underperformed the broader markets in the last one week. The blue-chip Nifty index has rallied around 500 points or nearly 8 per cent since the announcement of the Union Budget on February 29.
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