HDFC Securities' research report on LTIMindtree
LTIMindtree (LTIM) reported largely in-line performance in Q1FY24. With flat sequential revenue performance in Q1, the ask rate is substantial (>4% CQGR) for LTIM to achieve its ‘aspirational’ double-digit growth for FY24E. We believe that LTIM will continue to grow at a considerable growth premium to tier-1 IT and the company will take market share from tier-1 IT (5% of India tier-1 IT but ~9% share of incremental growth). Key positives that are expected to accelerate growth for LTIM are (1) book-to-bill of 1.3x in the last two quarters (Q1 bookings up 16% YoY), which provide visibility along with 10% QoQ in deal pipeline to supplement H2 acceleration; (2) strong renewal in large Hi-Tech account and growth in T5 accounts; (3) improving tech spends of large BFS clients and key deals in the insurance sub-segment; and (4) stable operating profile with higher project transition timelines, which currently support better resource allocation that will enable the targeted FY24 exit of 17 to 18% EBITM.
Outlook
Maintain BUY on LTIM, with a TP of INR 5,820, based on 26x Jun-25E EPS.
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