Buy LTIMindtree Ltd For Target Rs. 6,673 By Geojit Financial Services Ltd
Strong order inflow to drive future performance
LTIMindtree Ltd (LTIM) is a global information technology (IT) consulting and digital solutions company focusing on verticals such as banking, financial services and insurance (BFSI), retail, travel and hospitality, manufacturing and resources, health, and hi-tech.
* Consolidated revenue increased 7.1% YoY to Rs. 9,661cr in Q3FY25, driven by growth in the BFSI and High-Tech, Media & Entertainment segments.
* All the segments logged growth in this quarter. While BFSI grew 10.1% YoY, technology, media, and communication rose 10.7% YoY, manufacturing and resources clocked 1.9% growth YoY, and customer business and healthcare, life sciences & public services verticals grew 2.2%.
* EBITDA increased marginally by 0.5% YoY to Rs. 1,593cr, but EBITDA margin declined 110bps YoY owing to higher employee expenses (+11% YoY).
* Reported PAT fell 7.1% YoY to Rs. 1,087cr, primarily due to muted EBITDA during the quarter.
* Order inflows stood at a record high of USD 1.68bn, a 29% increase QoQ. LTIM had 742 active clients as of Dec 31, 2024.
Outlook & Valuation
LTIM reported growth across all its segments in Q3FY25, but profit margins fell due to increased expenses. Strong order pipeline along with cost reduction and vendor consolidation, expected to support its revenue and margins in the future. Thus, the company giving a positive outlook for FY25 and FY26. The company’s partnership with voicing.ai’s agnetic AI is expected to reduce the cost and provide superior service to the clients. With increasing number of deals and sustained growth in BFSI sector, the company expects to improve the profit margins in the future. Hence, we upgrade our rating to BUY on the stock with a rolled forward target price of Rs. 6,673 using a target multiple of 30.5x P/E on FY27E adj. EPS.
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SEBI Registration Number: INH200000345
