Neutral LTIMindtree; target of Rs 4590: Motilal Oswal

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26 Aug, 2025 12:21

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The company is witnessing a secular trend in the investment cycle. Enterprises are continuing their digital spending in the front-end new age services: Cloud, Data and Security. However, the management remains cautious in specific pockets, where investments might take a pause due to adverse macros. The management indicated that the decision-making cycle is getting elongated in few accounts. With emerging macros, the slowdown might be pronounced, which could affect 1HFY24 performance. As a combined entity, LTIM is in a better position to pursue large deals with its nine distinct complementary service lines. With its horizontal capabilities, the company can work on several small deals, which have strong potential to scale up further and build stickier annuity-based revenue over a longer horizon. The company has designed a GTM (Go-to-Market) strategy while aligning its delivery and functional areas to suit clients’ requirement. The focus is to amplify capabilities from both entities to have end-to-end presence in the digital transformation areas (core to experience to edge).

LTIM as a combined entity has deep domain capabilities, strong partnerships with hyperscalers, and a robust sales engine, which will result in industry-leading growth. We expect a USD revenue CAGR of ~13% over FY23-25, which is at the top end of our Tier I IT Coverage Universe. We value the stock at 25x FY24E EPS. We have a Neutral rating with a TP of INR4,590.

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