Neutral Mindtree; target of Rs 4230: Motilal Oswal

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26 Aug, 2025 12:21

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Motilal Oswal's research report on Mindtree

MTCL reported a revenue of USD384m (+5.2% QoQ CC) in 4QFY22. Reported revenue grew 4.8% (inline), driven by broad-based growth across verticals and regions. Deal TCV rose 9% QoQ to USD390m in 4QFY22. The management reiterated that the demand environment continues to remain strong, and expects industry-leading growth in FY23. EBITDA margin fell 50bp QoQ (inline) in 4QFY22 on higher utilization and offshoring. MTCL was largely able to sustain margin, despite wage costs and higher attrition at 23.8%. We view continued execution in both revenue growth and profitability as a key positive for the stock. We expect revenue to remain robust and margin to remain stable. We expect it to deliver 20% CAGR in USD revenue and 19% in INR PAT over FY22-24. Net additions (~3.1k, total headcount up 9.7% QoQ) in 4QFY22 continue to remain robust. MTCL has now added ~11.2k employees in FY23, with a large share coming from freshers. We maintain our Neutral rating on MTCL due to its fair valuations (28x FY24E P/E) as well as relatively higher client concentration (top client accounts for 24% of revenue), although it is moving in the right direction.

Outlook

We raise our FY23/FY24 EPS estimate by 1.9%/1.4%. Our margin estimate is on the higher side of the over 20% range guided by the management, given it was able to sustain margin in 4QFY22, despite the headcount addition. As the stock is trading at 28x FY24E EPS, we see limited upside hereafter. Our TP of INR4,230/share implies 30x FY24E EPS. We maintain our Neutral rating.

More Info

At 14:19 hrs Mindtree was quoting at Rs 3,770.40, down Rs 190.40, or 4.81 percent.

It has touched an intraday high of Rs 4,080.00 and an intraday low of Rs 3,761.25.

It was trading with volumes of 105,638 shares, compared to its thirty day average of 39,179 shares, an increase of 169.63 percent.

In the previous trading session, the share closed down 3.33 percent or Rs 136.35 at Rs 3,960.80.

The share touched its 52-week high Rs 5,059.15 and 52-week low Rs 1,999.85 on 18 November, 2021 and 19 April, 2021, respectively.

Currently, it is trading 25.47 percent below its 52-week high and 88.53 percent above its 52-week low.

Market capitalisation stands at Rs 62,148.93 crore.

For all recommendations report, click here

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