LTIMindtree Q4 Results Review: Goldman Sachs Cuts Price Target Post Muted Earnings, Higher US Exposure
The brokerage trimmed its price target to Rs 4,210 on the company, indicating a 7.2% downside, while maintaining its 'neutral' call.
IT major LTIMindtree Ltd.'s relatively high exposure to the US, as well as its discretionary exposure, may spell trouble for the company in the medium-term horizon, suggested a recent note by brokerage firm Goldman Sachs.
It trimmed its price target to Rs 4,210 per share, indicating a 7.2% downside, while maintaining a 'neutral' call.
LTIMindtree's performance in the quarter ended March 31, 2025 was broadly in line with that of its Indian peers, said the note. A delay in deal ramp ups and deal closures, alongside muted discretionary spends, was highlighted by the management of the company.
It, however, has witnessed two consecutive quarters of strong order wins, and expects to lock down more deal closures in the current quarter, aiding growth recovery and stronger margins, said Goldman Sachs.
While we believe balancing both growth and margins may be difficult, particularly in a weak macro environment, if the company were to be able to deliver this, we see upside risks.Goldman Sachs
The brokerage trimmed its revenue and earnings per share estimates for the company by 5% and 7%, respectively. The company is trading below its five year price to earnings multiple, and its premium—as compared to the sector—is in line with history, they said.
Coming to potential risks, further deterioration in margins, or a slip in the maintenance of the company's hierarchy in the sector would deter investor sentiment, as per the note. However, the brokerage views any large deal ramp up along with margin expansion as a positive catalyst.
LTIMindtree Q4 Results Highlights (Consolidated, QoQ)
Revenue up 1.1% at Rs 9,772 crore (Bloomberg estimate: Rs 9,887 crore).
EBIT rises 1% to Rs 1,345 crore (Estimate: Rs 1,428 crore).
Margin expands to 13.8% versus 13.7% (Estimate: 14.45%).
Net profit up 4% at Rs 1,128 crore (Estimate: Rs 1,171 crore).
On Wednesday, shares of the company closed 5.01% higher at Rs 4,536.70 apiece, sharply overperforming the benchmark NSE Nifty 50 which closed 0.67% higher.
