Brokerages raise Mindtree's target price on strong results

MUMBAI: Bangalore-based IT company Mindtree beat Street expectations with its solid first quarter results. The company is also confident of beating the NASSCOM guidance of 13-15 per cent for FY15.

“Growth was broad-based and especially strong in travel and hi-tech verticals. Hi-tech’s return to growth after several quarters of stagnation is a key positive. Underlying drivers of growth are encouraging – market share gains through crossselling of services in key accounts and solid deal wins in its areas of focus,” said Kotak Securities report.

According to the brokerage, Mindtree continues to deliver on its multi-segment specialist strategy and is deepening engagements with key clients. Its deal wins are improving as well, and will continue to support strong growth in the coming quarters.

It has raised FY2015-16E earnings by 4-5 per cent and target price by 6 per cent to Rs 950 from Rs 900 earlier, valuing the company at 14X FY2016E earnings.

“Visibility in revenue growth and profitability justifies premium valuations,” it added.

Credit Suisse has raised its target on Mindtree to Rs 1,000 from Rs 900 while maintaining ‘Outperform’ rating. The brokerage has raise earnings estimates by 2 – 3 per cent on Q1 results. Revenue growth continues to remain impressive and margins will likely remain stable in FY15, it says.

Goldman Sachs is of the view that the company is showcasing demand up cycle with rise in deal wins. It has raised target to Rs 900 from Rs 840 while maintaining Neutral stand.

Citigroup is of the view that robust momentum continues as Hi-tech delivered good growth. The stock remains one of the top picks in Indian IT space.

The brokerage has raised target to Rs 985 from Rs 972 while maintaining ‘Buy’ recommendation.

At 02:40 p.m.; the stock was at Rs 890.30, up 1.08 per cent, on the BSE. It touched a high of Rs 905 and a low of Rs 884 in trade today.