LTIMindtree share price falls 3% after Q4 result; experts divided about the stock

LTIMindtree Q4 result

LTIMindtree's Q4FY24 nett net declined 1.2 per cent year-on-year (YoY) to ₹11,007 crore amid weakness successful its banking vertical and persisting merger issues astatine the company.

LTIMindtree declared a last dividend of ₹45 per equity stock for the fiscal twelvemonth ended March 31, 2024.

Also Read: Q4 results: LTIMindtree declares last dividend of ₹45 per equity share

As Mint reported, LTIMindtree reported a driblet successful quarterly gross for the archetypal clip since the institution came into beingness successful November 2022.

Also Read: LTIMindtree reports driblet successful quarterly revenue, borderline falls further

Brokerages explicit mixed views

LTIMindtree stock terms has gained astir 13 per cent implicit the past twelvemonth against a 23 per cent summation successful equity benchmark Sensex.

Many experts and brokerage firms bash not look upbeat astir the stock's maturation prospects.

Sanjeev Hota, Head of Research astatine Sharekhan by BNP Paribas has a clasp standing connected the stock. He pointed retired that LTIMindtree reported weaker than expected gross de-growth successful changeless currency terms.

"LTIMindtree has been missing estimates for a fewer quarters reflecting weakness and unit amid a challenging environment. Further, apical absorption exits, which were foreseen arsenic cardinal risks astatine the clip of the merger, look to beryllium playing retired and are apt to deter and defer the gradual betterment successful the adjacent to mean term," said Hota.

Also Read: Axis Bank stock terms rises 5% buoyed by steadfast Q4 numbers; should you buy, merchantability oregon hold? Here's what experts say

Brokerage steadfast Nirmal Bang has a merchantability telephone connected the banal with a people terms of ₹3,978, implying a 16 per cent downside arsenic it said LTIMindtree posted beneath estimates numbers.

"LTIMindtree posted Q4FY24 beneath our arsenic good arsenic statement estimates. Although it sees Q4FY24 arsenic a one-off and is assured of maturation from Q1FY25, determination was nary clarity connected whether FY25 gross maturation volition beryllium amended than that successful FY24 (which was up 4.2 per cent YoY successful CC terms)," Nirmal Bang said.

The brokerage steadfast trimmed its net per stock (EPS) estimates for FY25-FY27 by astir 9 per cent owed to some gross and borderline cuts. W

"We person raised the discount to the people PE aggregate of TCS to 15 per cent from 10 per cent and present usage a people PE aggregate of 20.1 times owed to weaker-than-expected execution done FY24. While medium-term prospects of faster than tier-1 net maturation and precise precocious ROICs remain, the existent valuations are excessive," Nirmal Bang said.

Motilal Oswal Financial Services has a 'neutral' presumption of the banal with a people terms of ₹5,020. Motilal has reduced its FY25 and FY26 net estimates by astir 6 per cent and 9 per cent, respectively, aft cuts successful gross and profitability.

"LTIMindtree is presently trading astatine 24 times FY26E EPS, which adequately captures the maturation opportunities ahead," said Motilal Oswal.

However, immoderate brokerage firms stay hopeful astir LTIMindtree's prospects.

Nuvama Wealth Management retained its bargain telephone connected the banal with a people terms of ₹6,650, implying a 41 per cent upside potential. It said it remains assured of LTIMindtree’s fundamentals, though it mightiness instrumentality immoderate clip to get backmost onto a beardown maturation path.

"Management commentary, though soft, is overmuch much sanguine than Q3FY24’s—the institution expects maturation to instrumentality adjacent quarter, and to physique upon that. We are tweaking FY25E/26E EPS (less than 1 per cent)," said Nuvama.

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Disclaimer: The views and recommendations supra are those of idiosyncratic analysts, experts and broking companies, not of Mint. We counsel investors to cheque with certified experts earlier making immoderate concern decisions.

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Published: 25 Apr 2024, 11:42 AM IST