Outperform on LTIMindtree, target price Rs 6,255: BNP Paribas Securities

BNP Paribas Securities has an outperform call on LTIMindtree with a target price of Rs 6,255. The current market price of LTIMindtree is Rs 5687.8. LTIMindtree, incorporated in 1996, is a Large Cap company with a market cap of Rs 169001.06 crore, operating in the IT Software sector.

LTIMindtree's key Products/Revenue Segments include Software Development Charges & Other Services for the year ending 31-Mar-2023.

Investment Rationale

LTIMindtree's growth has started broadening across verticals and geographies. LTIMindtree's higher discretionary exposure and strong digital capabilities, especially in customer experience, position it as a key beneficiary of a recovery in discretionary spending. Given its execution track record, coupled with post-merger untapped revenue- and margin-synergy opportunities, BNP Paribas Securities expects LTIMindtree to offer solid earnings growth potential that is well-deserving of its premium valuation.

Valuation methodology: BNP Paribas values LTIMindtree using DCF methodology, with FY4-11E revenue growth of 11.5%, WACC of 10.5% and terminal growth of 5%.

Financials
For the quarter ended 30-09-2024, the company has reported a Consolidated Total Income of Rs 9731.80 Crore, up 3.86 % from last quarter Total Income of Rs 9369.70 Crore and up 7.55 % from last year same quarter Total Income of Rs 9048.60 Crore. Company has reported net profit after tax of Rs 1251.60 Crore in latest quarter.

The company's top management includes Mr.A M Naik, Mr.Bijou Kurien, Mrs.Apurva Purohit, Mr.Vinayak Chatterjee, Mr.Sanjeev Aga, Mr.James Abraham, Mr.R Shankar Raman, Mr.Nachiket Deshpande, Mr.Sudhir Chaturvedi, Mr.Debashis Chatterjee, Mr.S N Subrahmanyan, Mr.Chandrasekaran Ramakrishnan. Company has Deloitte Haskins & Sells LLP as its auditors. As on 30-09-2024, the company has a total of 30 Crore shares outstanding.

Promoter/FII Holdings
Promoters held 68.6 per cent stake in the company as of 30-Sep-2024, while FIIs owned 7.39 per cent, DIIs 14.73 per cent.