Hold LTIMindtree; target of Rs 4850: Emkay Global Financial

Emkay Global Financial's research report on LTIMindtree

At its analyst meet, LTIMindtree (LTIM) unveiled its ‘LTIM One’ strategy aimed at enabling it to realize full potential of the merger by driving a unified culture, GTM, and capability & experience across the organization, and delivering sustainable profitable growth. The company targets achieving USD1bn revenue synergies and delivering industryleading, consistent profitable growth by leveraging the expanded growth opportunities presented by its diversified vertical, cross-sell/upsell opportunities, partnership-led sales engine, LTIM One strategy and best-in class IP portfolio. The company expects Q4FY23 EBITM to expand by ~200bps QoQ, on the back of reduced impact of merger-related costs and furloughs. It plans to quickly retrace the normalized EBITM range of 17-18% and further scale it up by 200bps by FY27, via delivering cost synergies, SG&A leverage and operational efficiency.

Outlook

We remain positive on the medium-to-long term growth prospects of LTIM, but current valuations offer a limited upside and near-term growth moderation, due to softness in Hightech & Retail as well as macro uncertainties. We roll forward our TP to Mar-25E EPS and maintain HOLD with a TP of Rs4,850/share (earlier Rs4,600) at 23x its Mar-25E EPS.