Morgan Stanley maintains underweight on Mindtree, raises target price to Rs 725

Morgan Stanley has maintained underweight rating on Mindtree in the long term and revised target price to Rs 725 from Rs 705. Shares of Mindtree ended down 1.9% at Rs 729.35 on Thursday while BSE Sensex closed 453.07 points up at 39,052.06.

Company Financials

For the quarter ended 30-09-2019, the company has reported consolidated sales of Rs 1914.30 crore, up 4.37% from last quarter sales of Rs 1834.20 crore and up 9.05% from last year same quarter sales of Rs 1755.40 crore. The company has reported net profit after tax of Rs 135.00 crore in the latest quarter.


Investment Rationale

Revenue growth in Q2 was better than expected but margins were soft, leading to weaker earnings, said Morgan Stanley. Management did not comment on its growth outlook, though it indicated the deal pipeline is healthy. Upside risks include strong execution and significant improvement in margins, said Morgan Stanley.