After surpassing many larger peers in 2016, Mindtree Ltd. is now the most expensive among the top eight information technology (IT) companies in India.
Mindtree's forward price-to-earnings (PE) ratio for the financial year 2016-17 stands at 17.6 times. Tata Consultancy Services Ltd. (TCS) comes in second with a forward PE of 16.8 times, while other IT firms' PEs are not over 15 times.
The most expensive IT stock is also the one that analysts are most bearish on. 52 percent of analysts tracked by Bloomberg have a sell rating on Mindtree, that's the highest in the IT pack.
Wipro Ltd. is next in line, with 38 percent sell ratings, while Mphasis Ltd. comes in third with 27 percent sell ratings.
Mindtree shares are expected to rise just 3 percent in the next 12 months, according to the consensus estimate of analysts. Only Mphasis, with a return potential of -1 percent, is expected to fare worse.
The question then is, if Mindtree is the most expensive, with the most sell ratings, and a lower return potential than its peers, will its share price hold at current levels?
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