Reduce LTIMindtree; target of Rs 6000: Emkay Global Financial

Emkay Global Financial recommended reduce rating on LTIMindtree with a target price of Rs 6000 in its research report dated January 17, 2025.

Broker Research

January 17, 2025 / 17:58 IST

Reduce

Emkay Global Financial's research report on LTIMindtree

LTIM reported a mixed performance in Q3FY25; revenue growth of 1.8% QoQ CC was in line with our estimate, while EBITM of 13.8% fell slightly short of our expectations. Deal wins of USD1.7bn (book-to-bill: ~1.5x) was the highest ever, supported by large deals, vendor consolidation, and deal renewals, particularly in BFSI. The deal pipeline continues to be dominated by cost reduction and vendor consolidation. The management expects growth momentum to sustain in Q4 on the back of deal ramp-up, partial reversal of furloughs, and continued strength in BFS, though partly offset by near-term headwinds from AI-driven productivity in the top client and lesser working days. Discretionary spending has improved in select pockets of BFS (regulatory space), though broad-based spends are yet to rebound in a secular manner. Based on recent deal-wins and pipeline, FY26 is expected to be better than FY25, with focus maintained on profitable growth.

Outlook

We tweak FY25-27E EPS by 1.2-1.8%, considering the Q3 performance; retain REDUCE and TP of Rs 6,000 at 28x Dec-26E EPS.

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