Most brokerages slash target price on Mindtree on poor Q2, shares tank

MUMBAI: Shares of software player Mindtree hit a 52-week low on Monday after a poor earnings show in the September quarter and subsequent cuts in target prices by most brokerages. Derivatives analysts said the stock may fall to Rs 420-430, implying another 5-8% downside from current levels.

The Bengaluru-based firm's second quarter revenue fell 3% sequentially as clients delayed spending decisions and the company forecasts a subdued third quarter.

“The stock has not performed in the last many series. During the time of consolidation, some longs were added but now we are seeing liquidation of long positions, said Chandan Taparia, derivative ana lyst at Anand Rathi, pegging support for the stock at Rs 427-430.

On Tuesday , the stock ended down 5.2% at Rs 454.70 after hitting a low of Rs 452.70 during the session.

“In uncertain macro-economic environment where ramp-ups are slower than ramp-downs, we prefer large cap IT companies over midcaps as they have more tools to manage revenue growth and margins,“ said Macquarie in a report, downgrading the stock to underperform.

Among others, Morgan Stanley lowered its target price to Rs 435 and Credit Suisse trimmed it to Rs 450.