Neutral LTIMindtree; target of Rs 4650: Motilal Oswal

Motilal Oswal's research report on LTIMindtree

LTIM posted 0.7% QoQ/13.5% YoY CC growth in 4QFY23, below our estimate of 1.6% QoQ. Growth was led by Retail & CPG (+2.4% QoQ) and BFSI (+2.7% QoQ), while CMT and Healthcare were down 1.5% OoQ and 2.2% QoQ, respectively. EBIT margin stood at 16.4%, in line with our estimate. PAT came in at INR11.1b, below our estimate of INR11.9b, due to an FX loss of INR523m v/s a gain of INR490m in Q3. Q4 performance was muted, with some pockets of weakness in the CMT and Healthcare verticals due to a slowdown in decision-making. LTIM expects Q1 performance to be affected by execution delay on few strategic accounts due to a near-term pause, followed by a strong pick-up on account of cost optimization deal wins in 2HFY23. The management expects this to help LTIM deliver double-digit YoY growth in FY24.

Outlook

Our TP of INR4,650/share implies 22x FY25E EPS. We maintain our Neutral rating.