Mindtree Q3 Review: Margin Beat, Raise Cycle Seems To Be Over, Says ICICI Securities
BQ Blue’s special research section collates quality and in-depth equity and economy research reports from across India’s top brokerages, asset managers and research agencies. These reports offer BloombergQuint’s subscribers an opportunity to expand their understanding of companies, sectors and the economy.
ICICI Securities Report
Besides transient Covid-19 led tailwinds, Mindtree Ltd.’s margin expansion was aided by sustainable and structural changes in costs.
While we expected parity with cost structure of Larsen and Toubro Ltd. by FY23E, the convergence has happened earlier! As some of the operational metrics (e.g. utilisations, salary costs) recalibrate towards their new normal, margins are more likely to contract (than be stable or increase).
Incrementally, as investor focus shifts from mere cost structure correction to growth, we see limited margin of safety for disappointments given the favourable FY21 base.
Click on the attachment to read the full report:
This report is authored by an external party. BloombergQuint does not vouch for the accuracy of its contents nor is responsible for them in any way. The contents of this section do not constitute investment advice. For that you must always consult an expert based on your individual needs. The views expressed in the report are that of the author entity and do not represent the views of BloombergQuint.
Users have no license to copy, modify, or distribute the content without permission of the Original Owner.