LTIMindtree Ltd. share price target

L&T; Infotech's (LTI) analyst meet focused on cloud and data products which are expected to be the new growth engines.

LTI will continue to invest in digital capabilities and strengthen their sales & marketing team and at the same time maintain stable PAT Margin of 14-15% LTI's large deal pipeline is strong at 1.9Bn up 62% YoY. (vs 7 large deals of...

At its 2020 analyst day, Larsen & Toubro Infotech (LTI) reiterated its outlook for industry-leading revenue growth and net profit margin of 14-15% for FY21. It targets to be a resilient enterprise and achieve this in every/any market condition. It targets to react and execute with speed to changes at the market place. To address the opportunities in the market place due to the pandemic it has launched 2 new dedicated businesses units - 1) Cloud and 2) Products. LTI also allayed concerns on slower large deal-wins in H1FY21 and confirmed that it has...

As part of the increased Cloud and Products focus, LTI is planning to increase investment in its sales and marketing team. Increased investment is necessary for it to establish its presence in front of customers and should benefit in the long term. However, we are skeptical of its ability to generate outsized revenue growth from these businesses in the medium term due to elevated competition, and expect these investments to continue over the next few years....

Q2FY21 has been a much-awaited recovery quarter for Indian IT, exhibiting a V-shaped rebound marked by growth and margin outperformance across the sector.

We recommend BUY and assign 24x P/E multiple to its FY23E earnings of Rs. 142 per share which gives a TP of Rs. 3,408 per share, an upside of 10%.

LTI has secured 1 large deal with net-new TCV of US$40 mn+, lower than our expectation. However, LTI allayed concerns and confirmed that the deal-pipeline is +22% YoY and it is confident of surpassing at least the Q4FY20 revenue run-rate in...