Kotak Institutional Equities has upgraded its rating on LTIMindtree from ‘Reduce’ to ‘Add’ and increased its target price from ₹5,500 to ₹6,200. The upgrade is based on expectations of a recovery in dollar revenue growth, with projections of 4.4% for FY24, 6.5% for FY25, and 11% for FY26.
The anticipated recovery is primarily attributed to improvements in two key verticals: Banking, Financial Services, and Insurance (BFSI) and Hi-Tech sectors. Kotak notes that a rebound in technology spending, particularly in the U.S. BFSI market, positions LTIMindtree as a key beneficiary of this trend.
Additionally, the brokerage highlighted that leadership departures within the company have stabilized over the past three to four months, following a period of significant exits in March and April. However, they caution that there remains limited scope for EBIT margin expansion in FY2025.
Kotak expects LTIMindtree to be a solid compounding play, projecting a strong and consistent earnings per share (EPS) growth trajectory. The target multiple has been raised to 28x from 26x, reflecting confidence in the company’s future performance.
Overall, the upgrade from Kotak reflects a more optimistic outlook for LTIMindtree, driven by expected recovery in key sectors and improved operational stability. Investors will be watching closely to see how these projections materialize in the coming quarters.
