LTIMindtree Share Price Falls Despite Healthy Q2 Results

Shares of leading IT services provider LTIMindtree plunged over 5% in early trade on Friday, a day after the company announced its second quarter results.

The stock declined as much as 5.2% to touch an intraday low of Rs 6,060.8 apiece on the NSE, against its previous close of Rs 6,394.45 apiece.

In its earnings report for the quarter ended Sept. 30, 2024, released on Thursday, LTIMindtree reported a 3.2% increase in its revenue to Rs 9,432.9 crore. The revenue was in line with the estimates of Rs 9,431 crore by analysts, as per a Bloomberg report. 

Net profit of the company increased 10% year-on-year to Rs 1,251.6 crore in the July-September period, compared to the street estimates of Rs 1,226 crore.

The IT firm reported a 13% drop in its Ebit at Rs 1,458.2 crore. The Ebit was lower than the analysts’ estimates of Rs 1,462 crore.

The Ebitda margins declined to 15.5% in Q2 FY25 compared to 18.4% in Q2 FY24.

The IT services firm also announced an interim dividend of Rs 20 per equity share for the financial year 2024-2025.

The record date for finalising the eligible shareholders for the dividend payment has been fixed as Oct. 25 by the board of directors of the company, a stock exchange filing showed.

The board further gave its consent for the closure of the company’s wholly-owned subsidiaries LTIMindtree Spain S.L. and LTIMindtree LLC as part of the entity rationalisation programme.

On Oct. 10, the company had unveiled its latest digital transformation platform, Smart Spaces 2.0, focused on environmental, social, and governance initiatives.

Amid the focus on the stock after the Q2 results, out of 39 analysts monitoring the company, 20 have assigned a 'buy' rating. On the other hand, eight assigned a 'hold' and 11 recommended a 'sell' rating on the IT stock, according to the Bloomberg data. The average 12-month analysts' consensus price target indicates a potential downside of 4.6% per share.

LTIMindtree shares were trading at Rs 6,116.8 apiece at 9:50 a.m. on Thursday on the NSE, down by 4.34%, compared to a 0.43% drop in benchmark Nifty