Broker’s call: LTIMindtree Reduce

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Choice Broking

Target Price: ₹5,715

CMP: ₹5,754.05

LTIMindtree Ltd reported decent Q1-FY25 revenues at $1,096.2 million, up 2.6 per cent q-o-q/+3.7 per cent y-o-y in cc terms (2.5 per cent q-o-q and up 3.5 per cent y-o-y in $ terms) amidst green shoots in demand. Rupee revenue stood at ₹9,140 crore, up 2.8 per cent q-o-q and 5.1 per cent y-o-y. Q1-FY25 order book TCV stood strong at $1.4 billion. PAT for the quarter came in at ₹1,130 crore (down 1.5 per cent y-o-y). EPS stood at ₹38.3. OCF to PAT was 109.9 per cent while FCF to PAT was 88.6 per cent.

The company had a positive start to FY25E with signs of recovery in demand and hence it is expected that the momentum shall continue in Q2 as well. The broader macro environment has remained unchanged and businesses continue to adopt agile strategies to cope with the economic conditions.

The company has a strong order inflow and healthy deal pipeline, setting the stage for medium-term growth. With green shoots visible, management has a significant runway to capitalize on the value preposition it brings to their clients.

The stock has already rallied over 10 per cent in a month and hence we downgrade our rating to Reduce to arrive at a revised target price of ₹5,715 implying a PE of 29x (modified) on FY26 EPS of ₹197.