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IDBI Capital Report
LTIMindtree Ltd. reported subdued Q4 FY24 numbers mainly led by ramp down in BFSI clients and lower discretionary spend.
LTIMindtree is winning cost efficiency and cost take out deals. Apart from this healthy order book ($ 5.6 billion in FY24 up 15.7% and book to bill of 1.3 times), absence of further ramp down, healthy deal pipeline and synergy benefits we expect the company to deliver better FY25E versus FY24.
Hence, we have built in a 6.1% YoY growth in FY25E versus 4.4% YoY in FY24. However, we expect margins to be impacted due to re-investment in business and transition cost of large deals.
Hence, we have revised our earning per share estimates downwards by 7% and 9% for FY25E and FY26E.
Consequently, we have lowered our target price downwards from Rs 5,660 to Rs 5,000 (25 times FY26E earning per share). However, recent decline in stock price prompts us to upgrade the stock from 'Sell' to 'Hold'.
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