Emkay Global Financial has given Hold recommendation for Mindtree with a target price of Rs. 4400 in its research report issued on Apr 19, 2022

Emkay Global Financial’s report on Mindtree

MTCL delivered a steady operating performance in Q4. Revenue grew by 4.7% QoQ (CC 5.2%) to USD383.8mn, broadly in line with our expectations. EBITDAM contracted by ~50bps QoQ to 21% and came in a tad better than our expectations. Deal wins remained healthy in Q4 at USD390mn vs. USD358mn in Q3, taking the TCV of deals signed in FY22 to ~USD1.6bn (16.7% YoY). Management indicated that the deal intake remains well-balanced across annuity and transformational deals. The company is confident about maintaining revenue growth momentum and delivering top quartile growth in FY23 while sustaining EBITDAM over 20% on the back of broadbased revenue growth, strong deal wins, and a healthy deal pipeline.

Outlook

We raise our FY23E/24E EPS by 3.2%/3.5%, factoring in the Q4 performance and higher other income assumptions. Considering rich valuations, we maintain Hold rating on the stock with a TP of Rs4,400 (Rs4,300 earlier) at 33x Mar’24E EPS.

More Info

At 16:01 hrs Mindtree was quoting at Rs 3,638.70, down Rs 322.10, or 8.13 percent.

It has touched an intraday high of Rs 4,080.00 and an intraday low of Rs 3,564.75.

It was trading with volumes of 167,819 shares, compared to its thirty day average of 39,179 shares, an increase of 328.34 percent.

In the previous trading session, the share closed down 3.33 percent or Rs 136.35 at Rs 3,960.80.

The share touched its 52-week high Rs 5,059.15 and 52-week low Rs 1,999.85 on 18 November, 2021 and 19 April, 2021, respectively.

Currently, it is trading 28.08 percent below its 52-week high and 81.95 percent above its 52-week low.

Market capitalisation stands at Rs 59,978.06 crore.

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