Buy LTIMindtree; target of Rs 7360 Prabhudas Lilladher

Prabhudas Lilladher is bullish on LTIMindtree has recommended buy rating on the stock with a target price of Rs 7360 in its research report dated October 18, 2024.

Broker Research

October 18, 2024 / 12:41 IST

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Prabhudas Lilladher's research report on LTIMindtree

LTIM reported strong revenue growth of 2.3% QoQ CC (USD 2.8% QoQ), in line with our estimates of 2.3% CC and above consensus estimates of 2.4% USD QoQ. The growth was broad-based across verticals and geographies with healthcare growing by 6.1% QoQ while BFSI sustained its growth momentum with 3.9% QoQ growth. EBIT margin grew by 50 bps QoQ to 15.0% vs our estimates of 30 bps improvement largely due to absence of one off visa expense incurred in Q1. Deal wins were steady in Q2 with bookings of US$ 1.3 billion, including a multi-year large deal of US$200 million TCV. The company executed strongly with broad-based growth across verticals and geographies aided by healthy momentum within BFSI coupled with strong recovery in other parts of the portfolio. Despite having strong momentum across BUs, the nature of the engagement continues to be cost-focused while discretionary continues to get deprioritized.

Outlook

With strong execution strategy and robust sales engine, LTIM is well positioned to play in the challenging environment with a mix of cost and transformation programs. We are baking in USD revenue/earnings CAGR of 9.7% and 13.7%, respectively. We are assigning P/E of 32x to FY27E with a target price of INR 7360. Maintain BUY.

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