MindTree Ltd. share price target

US$ revenues grew 2.1% QoQ to $251.5 million, in line with our $251.4 million estimate. Constant currency revenues grew 2.4% QoQ The EBITDA margin expanded 50 bps sequentially to 15.9% (above...

Mindtree's (MTCL) Q3FY19 revenue and operating margins were in line with estimates. Revenues from the top client stayed strong but that from the top 6-10 clients declined by 2.5% QoQ. Deal-win TCV was uninspiring though management commentary was relatively more positive than last quarter. We trim FY20E/FY21E EPS by 0.3%/1.7% and pare our target one-year forward P/E multiple from 20x to 17x on waning growth momentum. Upon rollover to Dec'19, our target price reduces from Rs 1,120 to Rs 1,010. Maintain ADD....

16 January 2019 MTCLs 3QFY19 revenue grew 2.4% QoQ in constant currency (18.6% YoY CC), in line with our estimate of +2.6% QoQ. EBITDA margin expanded 50bp QoQ to 15.9%, marginally higher than our estimate of 15.4%. PAT was down 7.3% QoQ to INR1,912m, as against our estimate of a 28% QoQ decline, primarily due to lower ETR (14% v/s our estimate of 26.5%, adjusting for which, PAT was INR1722m) triggered by the reversal of INR190m under the Scheme of Amalgamation post Magnet360s merger into the company. For 9MFY19, revenue grew 19.7% YoY CC, while EBITDA/PAT increased 55.3%/68% YoY. MTCL cited that it expects 4Q revenue growth to come in marginally better than that in 3Q. A 3% QoQ CC revenue growth would imply YoY CC growth of 17% and FY19 CC growth of 19%.

Mindtree delivered a steady performance for Q3FY19 with below CC growth Change in Estimates | Target | Reco during the quarter with digital remains the key driver for Incremental growth....

Mindtree's revenue growth of 2.4% qoq in CC terms, which came in slightly higher than our expectations of 2.0%, was largely driven by realizations as volumes were down 1.1% qoq. EBIT margins improved 50bps qoq to 13.6% vs. our expectations of 13.2%. In Q4FY19, Mindtree expects revenue growth to be better than that of Q3FY19, with margins remaining stable. Although management has not provided any quantitative outlook for FY20, positive commentary and ~20% yoy growth in TTM TCV growth in...

Management sounded cautious on near term growth outlook as uncertainty around Brexit is hurting customer sentiment leading to lower IT spending and slower adoption of digital offerings in BFSI. We tweak our target multiple to 16xFY20E EPS (21x earlier) to take into account...

Recently, the stock price of Mindtree Ltd.(Mindtree) corrected by ~28% from 52-week high of Rs.1,184as the company has posted lower revenue growth mainly due to closure of some projectin Europein the quarter. Mindtree, a mid-tier IT company, has presence in select verticals like, BFSI, Retail, Travel, Hi-Tech and services like, Digital, IMS and ADM. Its success is largely due to its niche positioning and strong management pedigree. Its strategy has been backed by strong execution, which has helped it grow above industry rate at a CAGR of 14% in IT Services business in the last five...

Dollar revenues increased 2.0% QoQ while rupees grew 7.1% QoQ to | 1,755 crore mainly led by rupee depreciation EBITDA margin expansion was mainly led by rupee depreciation that helped absorb higher investment in talent acquisition. Margin expansion was due to promotion & full quarter impact of fresher hiring in Q1FY19 (-60 bps) offset by absence of investment in Stanford University (+60 bps) & rupee depreciation benefit (+130 bps) Softness in Retail & BFSI prompts us to lower revenue expectation...

Mindtree Ltd Q2FY19 results Comment Mindtree Ltd Q2FY19 results Comment