LTIMindtree Q4 Results Review - Uninspiring Quarter: HDFC Securities

HDFC Securities Institutional Equities

LTIMindtree Ltd. delivered a muted print, impacted by project cancellations in banking, financial services and insurance. The company has been impacted by higher exposure to BFSI including large client related risks, sub-optimal deal pipeline and an extended period of integration (reflected in limited synergy/executive attrition).

We, however, remain positive on LTIMindtree medium-term prospects. LTIMindtree strong competencies across the spectrum of services (comparable and even better than some larger peers) as well as its strong large client mining track record can drive growth outperformance versus. larger peers.

Margin recovery is premised on growth recovery as drivers such as utilisation and delivery optimization (offshore/sub-con) are not levers.

We build 6.4% and 14.3% revenue growth for FY25E and FY26E and an earnings before interest and taxes recovering to 16.0/17.0% for FY25/26E, translating to 17% earning per share compound annual growth rate over FY24-26E.

Cut earning per share by 3-5% to factor delayed margin recovery - maintain 'Add' on LTIMindtree with a target price of Rs 5,340, based on 25 times FY26E earning per share.

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