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Dolat Capital Report
LTIMindtree Ltd. reported constant currency revenue growth of 2.3% QoQ (our estimate: 2.5%), led by broadbased growth across verticals.
Banking, financial services and insurance/healthcare (+3.9%/+6.1% QoQ) led the growth. Operating profit margin came at 15.5% up 46 bps QoQ (our estimate: 15.5%).
The company is cautiously optimistic about sustaining momentum into H2, following strong performance in H1. However, Q3 typically faces seasonal challenges, including furloughs and fewer billing days, which may moderate growth run rate.
Recent deals from the past two quarters are ramping up and supporting ongoing growth. The impact of furloughs remains uncertain, warranting close monitoring.
We tweak our FY25/26E EPS estimate by -3%/-3.1%, given slight change in commentary on concerns over lower client spends due to overhang of U.S. elections, which may slow down deal ramp-ups.
Given the recent price run, we revise our rating from Accumulate to ‘Reduce' with target price of Rs 6,350 valuing at 30 times FY27E earnings per share.
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