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Motilal Oswal Report
We upgraded LTIMindtree Ltd. to Buy on July 18, 2024, following its Q1 FY25 Results. The nascent recovery in the U.S. BFSI was a key consideration, but our decision was also driven by LTIMindtree's superior offerings in data engineering and ERP modernization, along with its strong ecosystem partnerships.
These factors position the company well for clients' next-gen and pre-GenAI spending. Since the upgrade, the stock has outperformed both the Nifty 50 index and Nifty IT index (LTIMindtree gained 11.0% versus ~2.5% for Nifty 50 and ~5.0% for Nifty IT).
Going forward, we believe that the U.S. BFS recovery will remain a key monitorable, with clients resuming ‘high-priority' projects in this vertical (BFSI accounts for ~35% of the revenue).
This, coupled with the resumption of ERP modernization projects, could catapult revenues higher for LTIMindtree.
However, the margin expansion and churn at the top-level management remain key concerns to our thesis. We value LTIMindtree at 35 times Sep'26E earnings per share.
We reiterate Buy with a target price of Rs 7,400, implying a 16% upside potential.
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