Reduce LTIMindtree; target of Rs 4740: ICICI Securities

ICICI Securities research report on LTIMindtree

LTIM reported in-line revenue growth led by a recovery in consumer and healthcare segments, and healthy momentum in BFSI. EBIT margin improvement of ~50bps QoQ was on expected lines, enabled largely by LTIM’s focused margin improvement program. TCV wins have been healthy with TCV up 13.6% YoY over the last three quarters. But this is yet to translate into revenue growth (5.3% YoY USD over same period). Management is focussing on execution i.e. improving its large deal pipeline and win rates amidst a challenging macro environment and expects revenue growth momentum to improve from here on.

Outlook

We continue to value LTIM at 22x on Q3FY27E to Q2FY28E EPS of INR 215 to arrive at a revised TP of INR 4,740. Maintain REDUCE. LTIM has higher exposure to its discretionary portfolio, constraining its growth in the current weak macro.