LTIMindtree is focused on maintaining sustained profitable growth and aims to expand Ebit margin going forward despite furlough seasonality. LTIMindtree has plans to hike wages spread equally over Q4 FY26 (starting Jan'26) and Q1 FY27 (starting Apr'26).
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LTIMindtree Ltd.'s revenue growth saw acceleration (2.3% QoQ USD) led by retail and healthcare verticals. BFSI continued to be weak with a six-quarter weak print of 0.1%, contrary to the broad sectoral trends. Total contract value, at $1.59 billion, included the media vertical mega deal.
160bps QoQ margin uptick was sharp, led by -Fit for Future initiatives and cuts in selling general and administrative spending. Company's outlook is positive for H2 FY26 on both revenue and margin fronts. However, top-5 client weakness arising from AI-led gain sharing is an overhang and has been ongoing since Q3 FY25.
H2 is especially weak for LTIMindtree, given its heightened sensitivity to furloughs (59% exposure to BFSI + hitech verticals). We maintain Reduce with a one-year forward target price of Rs 4,820 on an unchanged target P/E of 22x.
We have factored in H2 FY26 YoY growth of 7.5% (vs 5% growth in H2 FY25) given the rampup from PAN 2.0 and media vertical mega deal and revised FY26 EPS by 3.3%.
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