Accumulate LTIMindtree Ltd For Target Rs. 5,360 By Elara Capital
Large deal wins materializing
LTIMindtree (LTIM IN) today announced that it has won a multi-year deal (worth USD 450mn) from a leader in the global agribusiness sector. The deal tenure spans seven years. This deal is the largest in size for LTIM, yet and will likely add USD 60-65mn in incremental revenues in FY26E/FY27E. We view: i) the deal to be at similar margin as that of LTIM’s, ii) the deal’s quintessence is mainly vendor consolidation – LTIM is replacing a large peer and iii) the client is a large agriculture player based in the US. LTIM, in its Q4FY25 earnings call, had mentioned its focus on sales transformation and a new GTM structure aimed at winning large deals, which seems to be yielding results. LTIM is contemplating another large deal that should be announced in due course. We reiterate Accumulate.
Deal, the largest yet for LTIM: About USD 450mn in worth, seven-years in span and a leading global agribusiness player as the client, this deal is the largest yet for LTIM and a milestone in its strategic pivot towards AI-led service delivery. Per the agreement, LTIM will implement an AI-powered operating model to manage the client’s applications, infrastructure, and cybersecurity, leveraging platforms such as SAP S/4HANA, Microsoft Azure, ServiceNow, and proprietary AI frameworks. This win marks a major break-through for LTIM’s consumer business.
Simplified structure likely yielding results: LTIM, in its Q4FY25 earnings call, had indicated three initiatives to be implemented under the new CEO, to spur revenue growth and improve profitability – Sales transformation, new GTM (go to market) team (under the leadership of Mr. Nachiket Deshpande) and Fit4Future. The first two initiatives are focused on revenue growth and the third on improving profitability. LTIM expects these initiatives to yield results immediately. ‘Sales transformation’ is aimed at simplifying the sales structure from an effective standpoint (LTIM is not implementing any major change). The company is also contemplating another large deal
Maintain Accumulate; TP raised to INR 5,360: LTIM corrected from its peak in December 2024. This is mainly due to: i) uncertain leadership (the exit of Mr. Sudhir Chaturvedi, Head of Sales), and ii) uncertainty over the succession of Mr. Debashish Chatterjee, who is set to retire at the end of the calendar year. However, with the appointment of Mr. Venu Lambu as the CEO designate and of Mr. Nachiket Deshpande (erstwhile COO, LTIM) as Head – Global AI Services, Strategic Deals & Partnership, this uncertainty on leadership is likely behind now and foundation for a revival in revenue growth seems set. The company’s order book continues to be strong at USD 1.5 bn+ for last 2 quarters and is likely sustainable in the near term in our view.
We increase our FY26E/27E revenue estimates within 1.5-3% to factor in this large deal win. Accordingly, we also increase earnings estimates by 1.5-3.5% for FY26E/27E, So we raise our TP to INR 5,360 (from INR 5,180) with an unchanged P/E of 28x. Key risks to our estimates are lower-than-expected revenue and margin growth.
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SEBI Registration number is INH000000933
