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In-line Performance; Tactical Approach

Est. Vs. Actual for Q1FY26: Revenue – INLINE; EBIT Margin – INLINE; PAT – BEAT

Recommendation Rationale

• Encouraging macro outlook: The company has shown growth despite a challenging operating macro environment. The banking and financial services sector remains cautious 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 Q1FY26 was at $1.6 Bn, up 17% YoY. Among its deal wins, a global agribusiness leader selected the company to implement an AIdriven model for application management, infrastructure support, and cybersecurity services.

• AI implementation: LTIMindtree launched BlueVerse, an "Agentic AI ecosystem" that includes AI Advisory for accelerating innovation, AI Foundry for building solutions, and an Agent Marketplace with over 300 industry-specific AI agents. GCC as a service: An AIpowered offering, providing a modular framework for capability centres, including setup, infrastructure, facility management, and access to BlueVerse.

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: 30x FY27E P/E

Current TP: Rs 5,585/share

Recommendation: With a strong deal pipeline across business verticals, new partnerships, and higher adoption for new-age technologies, we believe LTIMindtree will gradually begin recovery from H2FY26. Hence, we resume our coverage with a HOLD rating on the stock

Financial performance

In Q1FY26, LTI Mindtree reported revenue of Rs 9,841 Cr vs Rs 9,143 Cr (Q1FY25), up 7.6% YoY and 0.7% QoQ. EBIT stood at Rs 1,407 Cr vs Rs 1,371 Cr (Q1FY25), up 2.6% YoY and 4.5% QoQ. Net Income came in at Rs 1,255 Cr vs Rs 1,135 Cr (Q1FY25), up 10.5% YoY and 11.2% QoQ, driven by higher other income. However, in CC terms, revenue grew by 4.4% YoY and 0.8% QoQ. Attrition levels remained at similar levels to 14.4% vs 13.3% QoQ. Utilisation levels for the quarter stood at 88.1% vs 85.8% in Q4FY25.

Valuation & Recommendation

The management remains optimistic for growth in FY26, led by execution and deal pipelines. We are constructive on the long-term outlook of the company. Hence, we resume over coverage with a HOLD rating on the stock and assign a 30x P/E multiple to its FY27E earnings to arrive at a TP of Rs 5,585/share, implying an upside of 8% from the CMP

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SEBI Registration number is INZ000161633