LTIMindtree Q1 Results Review - High Transformational Deals, AI Infusion In Focus: IDBI Capital

IDBI Capital Report

LTIMindtree Ltd. reported good set of numbers mainly led by ramp up in large deals (regular deals as well). The company is winning cost efficiency and cost take out deals. Apart from the healthy order book ($1.4 billion order inflow), absence of project cancellation impact, healthy deal pipeline and synergy benefits, we expect the company to deliver better FY25E versus FY24.

Management conveyed that the Saudi Aramco joint venture is still in the incorporation process and it will take more time to ramp up. Company emphasized on clients prioritizing on high transformational projects (85% of deals include AI) and confident on catering to the demand. There upon, we have maintained 7% YoY growth for FY25E.

However, we expect margins to be impacted due to re-investment in business. Hence, we have increased earnings per share estimates by 1% and 3% for FY25E and FY26E and target price to Rs 5,475 (27 times FY26E EPS) versus Rs.5000 and we maintain Hold rating on the stock.

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