Momentum Pick: 8-13% upside likely for LTIMindtree despite current underperformance; here’s why
The underperformance in this stock has been in line with the weakness in the IT pack which has corrected nearly 20% over a 1-year period, the data further showed.
LTIMindtree shares ended at Rs 4,662 on NSE on Friday, up Rs 108.95 or 2.39%.
Technical View
Centrum Broking on LTIMindtree | Buy | CMP: Rs 4,662 | Target: Rs 5,000 | Stop Loss: Rs 4,450 | Upside: 8%
Technical analyst Nilesh Jain holds a positive view on this stock with a positional term view. The stock has strong support at Rs 4,450 and is trading above its 50-day and 200-day moving averages, Jain said. He said that there will be a big breakout in the counter if the level of Rs 5,000 is breached. It has been trading with good volumes as well, he pointed out.
Momentum indicators RSI and MFI are in a medium range at 41.6 and 34, Trendlyne data further revealed. A number below 30 indicates that the stock is trading in the oversold zone while above 70 suggests it is in the overbought territory.
With a 1-year beta of 1.28, the stock is quite volatile and investors with a near-to-short-term view must watch out for the movement trends.
Fundamental View
Sharekhan: Buy | Target: Rs 5,170 | Upside: 13%
Brokerage firm Sharekhan maintains a buy on LTIMindtree with a belief that the company can take market share from tier-1 IT companies to 8-10% share of incremental growth from the current 5%. “We maintain a buy rating on LTIMindtree with a revised PT of Rs 5,170,” Sharkhan said in a note. 4,583.
The stock is valued at 25X FY25E EPS based on 16% revenue/PAT CAGR over FY22-25E, the note said further.
The management indicated that unified offerings under LTIMindtree are aiding deal wins owing to the expanded capabilities of the merged entity which would not be possible as a standalone entity, the note said. Large deal pipeline remains robust at 68 big deals with TCV (Total Contract Value) of $3.18 billion, the note further said.
– Company expects 17%-18% margin levels over the next few quarters and margin expansion by 200 bps by FY27.
– At CMP, the stock trades at 25.8/22.2X its FY24E / FY25E EPS respectively.
ET CONTRIBUTORSKey Risks listed by Sharekhan
– The outlook for FY24 continues to be uncertain on account of global headwinds and any recovery is most likely to be gradual.
– Rupee appreciation or/and adverse cross-currency movements, slower-than-expected technology spending by customers and a loss of any large clients would affect earnings.
ET CONTRIBUTORS(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of Economic Times)
