MindTree Ltd. share price target

Mindtree (MTCL) posted above-estimated revenue growth but below-par EBITDA margins in Q4FY19, making for an in-line operating performance. Q4 deal wins were soft. Management is targeting growth in the low teens and 100120bps margin expansion in FY20 (vs. 13.3% CC growth and +80bps estimated). We trim FY20E/FY21E EPS by ~2% on lower other income and cut our rating from ADD to REDUCE on risks of operational performance slippage amid L&T;'s unsolicited bid. Rolling valuations over, we have a Mar'20 target of Rs 990 (vs. Rs 1000)....

Inline operating performance; FY20 outlook no surprise Mindtree (MTCL) posted above-estimated revenue growth but below-par EBITDA margins in Q4FY19, making for an in-line operating performance. Q4 deal wins were soft. Management is targeting growth in the low teens and 100-120bps margin expansion in FY20 (vs. 13.3% CC growth and +80bps estimated). We trim FY20E/FY21E EPS by ~2% on lower other income and cut our rating from ADD to REDUCE on risks of operational performance slippage amid L&T;'s unsolicited...

Mindtree posted healthy revenue in 4QFY19, which stood at US$262mn (+4.2% QoQ in USD terms, +3.9% QoQ in CC terms). From a vertical perspective, BFSI grew at a robust 4.8% QoQ, with YoY growth crossing double digits (11.5%) for the first time since 3QFY18; among other...

Mindtree came out with good set of numbers in Q4FY19, PAT was ahead of our estimate though revenue & EBITDA were below our estimate. Revenue grew 25.6% YoY to Rs 18,394mn against our estimate of Rs 18,870mn. EBITDA stood at Rs 2803mn against our estimate of Rs 3270mn. PAT for the quarter stood at Rs 1984mn ahead of our estimate of Rs 1820mn. We are positive on the stock from longer term perspective, however due to ongoing news flow regarding stake sale/open offer activities, not much clarity is there for continuity of current management. To factor in this uncertainty...

of 4.2% QoQ USD inline with our estimates at USD262mn. MTCL posted CC revenue growth of 3.9% QoQ (Ple:3.2%, Cons:3%). Mindtree posted EBITDA margins better than we expected at 15.2% (PLe:15.5%) erosion of (-61bps...

L&T;, the parent of L&T; Infotech (LTI), has announced its intent to acquire ~66% stake in Mindtree (MTCL) as top shareholder VG Siddhartha looks to monetise his stake. We expect the recent correction in LTI (rated BUY, trading at 17.6x/15.1x FY20E/ FY21E P/E) to reverse as its parent has indicated plans to run MTCL as an independent entity. In our view, distractions at MTCL as the promoters tussle with L&T; over leadership control can impair operating performance, though we don't rule out the possibility of a short-term upmove in stock price amid the takeover bid....

Larsen & Toubro (L&T;) has entered into a definitive agreement to acquire the shares of MindTree Ltd. L&T; would buy a 20.32% stake in MindTree at | 980 per share aggregating to | 3269 crore. The shareholding of 20.32% corresponds to the holding of VG Siddhartha and entities related to him in MindTree. The company has made an offer to buy an additional stake of up to 15% through on market purchases of 2.48 crore shares at a price of not more than | 980/share amounting to | 2434 crore. Further, L&T; would make a tender offer of up to 31% of the voting share capital (5.13 crore...

We are downgrading Mindtree (MTCL) to Hold from Buy on hostile acquisition Change in Estimates | Target | Reco of MTCL by L&T.; We believe such scenario can result in 1) Spike in attrition 2) slowdown in business momentum due to discord between L&T; and...

Mindtree Limited is a multinational information technology and outsourcing company headquartered in Bengaluru, India and New Jersey, USA.

Maintain BUY with TP of Rs 1,140, 20x Dec-20E EPS supported by >30% RoIC and strong growth trajectory (rev/EPS at 14/25% CAGR over FY18-21E). Mindtree crossed >USD1bn annual revenue-rate, posted in-line rev and operating performance, while forex loss impacted profit. Revenue came at USD 251mn, 2.4/17.8% QoQ/YoY in CC terms. EBITDA margin increased by 48bps QoQ to 15.9% in 3Q. APAT came at Rs 1.62bn, impacted by forex loss of 0.37bn (vs. forex gain of Rs 0.40bn in 2Q).