LTIMindtree share price slumped over 6% on Friday's session following its Q2 results. The Q2 results have received mixed opinions from brokerages, but they are generally believed to be in line with the Street's estimate in terms of earnings.
The IT services firm, based in Mumbai, announced a 7.7% year-on-year increase in its consolidated net profit (attributable to the company's shareholders) for the second quarter of the fiscal year ending in September (Q2FY25), reaching 1,251 crore. The company had reported a profit of ₹1,161.8 crore in the year-ago period. Additionally, the consolidated net profit rose by 10.33% sequentially.
During the quarter ended in September, the company's consolidated revenue from operations amounted to ₹9,432.9 crores, marking a nearly 6% year-on-year increase from ₹8,905.4 crore in Q2FY24. Sequentially, there was a growth of 3.2% from ₹9,142.6 crore in Q1FY25.
The board of directors have approved an interim dividend of ₹20 per equity share of par value Re 1 each.
The brokerage stated that LTIMindtree posted strong Q2FY25 results, with revenue increasing by 2.3% QoQ/4.4% YoY in CC, consistent with their projected +2.4% CC QoQ growth. EBIT margin reached 15.5% (up 50bp QoQ), aligning with their expected 15.6%. Similarly, PAT at ₹1,251 crore also matched their predictions. TCV remained steady at USD 1.3 billion (flat YoY).
Nuvama reported that LTIMindtree has achieved over 2.5% growth for two consecutive quarters after experiencing two weak quarters. The BFSI and Hitech sectors have been the main drivers of this growth. With growth seen across various sectors in Q2 and strong support from the largest sectors, it is expected that LTIMindtree will continue to maintain its growth momentum.
“We are cutting FY25E/26E EPS by -3.8%/-3.7% on slightly lower margin trajectory. We continue to value LTIMindtree at 33x Sep-26E PE; retain ‘BUY’ with target price of ₹7,550 (unchanged). LTIMindtree remains our top sectoral pick and ‘BRAVEHEART' recommendation; maintain ‘BUY’,” the brokerage said.
The brokerage's report highlighted LTIMindtree's strong 2.3% QoQ CC (USD 2.8% QoQ) revenue growth, meeting their projected 2.3% CC and exceeding the consensus estimates of 2.4% USD QoQ. Revenue growth was evident across various sectors and regions, with healthcare showing a 6.1% QoQ increase and BFSI maintaining a 3.9% QoQ growth.
EBIT margin saw a 50 bps QoQ increase to 15.0%, surpassing the estimated 30 bps improvement, mainly due to the absence of a one-off visa expense incurred in Q1. Deal wins in Q2 remained consistent, with bookings of US$ 1.3 billion, including a significant multi-year deal worth US$200 million TCV.
“With strong execution strategy and robust sales engine, LTIMindtree is well positioned to play in the challenging environment with a mix of cost and transformation programs. We are baking in USD revenue/earnings CAGR of 9.7% and 13.7%, respectively. We are assigning P/E of 32x to FY27E with a target price of ₹7,360. Maintain BUY,” the brokerage said.
LTIMindtree share price today opened at ₹6,370 apiece on the BSE, the stock touched an intraday high of ₹6,374.95 and an intraday low of ₹6,016.05.
According to Rajesh Bhosale, Equity Technical and Derivative Analyst at Angel One, post-result announcement, LTIMindtree share price has seen a significant sell-off with prices down more than 5%. On the daily chart, we are seeing a double top formation and prices have slipped below key averages. In the near term, the sell-off would continue possibly towards 5,800. 6,250 is resistance.
“In today's correction, the stock has breached its 40 DEMA support, and the RSI oscillator has given a negative crossover. Thus, the stock could see a short-term corrective phase. The immediate support for the stock will be seen around ₹5,880,” added Ruchit Jain, Lead Research Analyst at 5paisa.
Disclaimer: The views and recommendations above are those of individual analysts, experts and broking companies, not of Mint. We advise investors to check with certified experts before making any investment decision.
