Citi cuts rating on Mindtree, says positives are priced in

Citigroup has downgraded Mindtree to sell from neutral as it believes positives appear to be priced in. The firm said business of Mindtree has stabilised but macro challenges such as global slowdown and coronavirus impact, still remain.

Moreoever, client concentration remains high and the stock, which is trading at a premium to comparable mid-cap companies, is likely pricing in flawless execution. The stock trades at 20 times based on estimates for financial year 2020-21(April-March), which is around 1.5 standard deviation above five-year mean, said Citi.

“We revise our target multiple to 18 times (versus 17 times earlier) given business stability post the new CEO coming in but downgrade to sell as positives appear to be priced in,” said Citi.


The brokerage has revised its target price on the stock to Rs 945 from Rs 875. Shares of Mindtree ended down 4.3% at Rs 984.50 on Thursday after Citi’s downgrade.