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Beat Across All Fronts; Growth Momentum to Continue

Est. Vs. Actual for Q2FY26: Revenue – INLINE; EBIT Margin – BEAT; PAT – BEAT

Change in Estimates YoY post Q2FY26:

FY26E/FY27E: Revenue: 3%/4%; EBIT: 4%/5%, PAT: 4%/5%

Recommendation Rationale

* Encouraging Macro Outlook: The company has shown growth despite a challenging operating macro environment. The BFSI and Hi-Tech sectors remained flattish sequentially due to macroeconomic conditions in selective client accounts. However, management continues to focus on business efficiency and cost optimisation strategy.

* Robust Deal Wins/Pipeline: The order book in Q2FY26 was at $1.6 Bn, up 23% YoY. The management expects the large deal momentum to continue in H2FY26 as well. The company stated that deal wins are centred around vendor consolidation deals, AI transformation programs

* AI Implementation: The Key initiatives adopted by LTIMIndtree are launching "Blueverse Studios" in Mumbai and London as AI collaboration hubs for clients. The company has completed the GenAI Foundation training program for 80,000 employees and has won multiple AI-specific deals, including developing agentic solutions and GenAI-based platforms for global clients.

Sector Outlook: Cautiously Optimistic

Company Outlook & Guidance: LTIMindtree sees strong focus from enterprises on scaling AI adoption across applications, workflows, and data platforms. It aspires to achieve its long-term $10 Bn revenue target by FY30.

Current Valuation: 33x FY27E P/E (Earlier Valuation: 30x FY27E P/E)

Current TP: Rs 6,400/share (Earlier TP: 5,585/share)

Recommendation: We recommend a BUY rating on the stock.

Financial Performance

In Q2FY26, LTI Mindtree reported revenue of Rs 10,394 Cr vs Rs 9,443 Cr (Q2FY25), up 10.2% YoY and 5.6% QoQ. EBIT stood at Rs 1,648 Cr vs Rs 1,458 Cr (Q2FY25), up 13% YoY and 17.2% QoQ. Net Income came in at Rs 1,381 Cr vs Rs 1,252 Cr (Q2FY25), up 10.5% YoY and 10.1% QoQ, despite lower other income sequentially. However, in CC terms, revenue grew by 4.4% YoY and 2.4% QoQ. Attrition levels remained at similar levels to 14.2% vs 14.4% QoQ. Utilisation levels for the quarter stood at 88.1% vs 87.7% YoY.

Valuation & Recommendation

The management remains optimistic for growth for FY26, led by execution and deal pipelines. LTI Mindtree anticipates seeing further improvement in YoY growth through H2FY26, aided by large deal wins, achieving its near double-digit growth YoY target. We are constructive on the long-term outlook of the company and value it at 33x of FY27E EPS and revise our rating from HOLD to BUY on the stock, with a TP of Rs 6,400/share, implying an upside of 14% from the CMP.

Relative Performance

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