Reduce LTIMindtree; target of Rs 4680: Choice Equity Broking

Choice Equity Broking's report on LTIMindtree

Revenue for Q4FY25 came at INR 97.7Bn up 9.9% YoY and 1.1% QoQ (vs consensus est. at INR 98.7Bn). EBIT for Q4FY25 came at INR 13.4Bn, up 2.8% YoY and 1.2% QoQ (vs consensus est. at INR 14.2Bn). EBIT margin was down 95bps YoY and flat QoQ to 13.8% (vs consensus est. at 14.4%). PAT for Q4FY25 stood at INR 11.2Bn, up 2.6% YoY and 4.0% QoQ (vs consensus est. at INR 11.8Bn). LTIM reported strong order inflow in FY25, totalling USD 6Bn, a 6.1% YoY increase, driven by a shift from discretionary projects to long-term, efficiency-focused deals. Q4FY25 alone saw USD 1.6Bn in new orders, the second consecutive quarter above USD 1.5Bn. Management is in promising talks with major retail clients, with updates on strategic deals anticipated soon. Some deals expected in Q4FY25 shifted to Q1FY26, boosting confidence in near-term growth.

Outlook

However, margin improvement efforts are underway. With 75% of revenue from North America, growth may be impacted by reduced IT spending and delayed contract renewals amid evolving tariff policies. As a result, we lower our estimates by 3–6%, revise our rating to ‘REDUCE’, and cut the target price to INR 4,680, implying a PE multiple of 25x (maintained) on FY27E EPS of INR 187.2.