“We expect LTIM to bounce back from the trough of FY2024 in the next couple of years. We expect consistent strong growth in a normalized demand environment, given the strong client profile, strength in key spend areas of clients, ability to address both growth and cost take-out agendas of clients and an experienced management team,” Kotak said in a note to clients.
Stating that LTIMindtree will be a key beneficiary of recovery in the impacted segments of BFS and hi-tech, the brokerage has increased EPS estimates a tad and raised fair value to Rs 6,200, valuing the stock at 28X September 2026E EPS.
“Our analysis indicates that a recovery in tech spending is on the cards for BFS, especially in the US, where LTIM will be a key beneficiary, courtesy of its presence in fast-improving
segments such as capital markets and in-demand areas such as risk and compliance and core modernization. LTIM is also a beneficiary of consolidation deals in the banking vertical with clients such as ABSA,” it said.Calling LTIMindtree to be a good compounding play with a strong and consistent EPS growth trajectory, it has upgraded the stock to add from reduce rating.In the meantime, the IT services company has also received a stay order from the Karnataka High Court on a Goods and Services Tax (GST) notice worth Rs 378 crore received by the company.“High Court has stayed the proceedings pursuant to above show cause notice till the next date of hearing, which is yet to be notified,” the Mumbai-based IT major said in a regulatory filing.
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