Mindtree Shares Plummet 6% on Missed Q4 Earnings Estimates, Citigroup Lowers Price Target

LTIMindtree Shares Fall 6 Percent After Missing Analyst Estimates

Shares of LTIMindtree fell 6 percent in trade on Friday after the company's March quarter earnings missed analysts' estimates on key parameters, including revenue and earnings before interest and tax (EBIT) margin.

The stock was trading at Rs 4,260 per share on the NSE, down 6 percent. The company's top-line growth during the quarter was driven by its technology, health and consumer business segments. However, revenue from the banking, financial services and insurance (BFSI) segment declined.

A closer look at the numbers reveals the extent of the decline in the BFSI segment:

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Brokerages attributed the 5.5 percent sequential decline in the BFSI vertical in constant currency terms to productivity pass-through in top clients. ICICI Securities noted that excluding top clients, the segment continues to grow at a healthy pace. However, brokerages do not expect a sharp ramp-up in the segment. Concerns over artificial intelligence-led deflationary pressures in the IT services sector persist.

Motilal Oswal Financial Services has cut its earnings per share estimates by 3 percent for FY27 and FY28, while maintaining a 'buy' rating on the stock. Citigroup, on the other hand, maintained a 'sell' rating and lowered its target price to Rs 3,850 from Rs 3,945, citing elevated valuations. It also reduced its earnings per share estimates for FY27 and FY28 by 1-4 percent.

Nomura and Nuvama Institutional Equities said the company is on track to recover margins. Nomura noted that the margin decline in the March quarter was likely due to salary hikes and may not persist beyond the June quarter. Nuvama said the stock is trading at around 21 times its FY27 price-to-earnings multiple, in line with large-cap peers.

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CLSA maintained an 'outperform' rating with a target price of Rs 5,755 per share. It said fourth-quarter performance was in line with expectations, though margins were slightly below estimates. The order book stood at $1.7 billion, flat sequentially and up 5 percent year-on-year. It added that BFSI clients are stabilising and deal momentum with Microsoft remains strong. The company's five-year plan targets a doubling of revenue, though no FY27 guidance has been provided due to uncertainty.

HSBC retained a 'buy' rating with a target price of Rs 5,250 per share. It said fourth-quarter performance was in line and expects growth momentum to continue in FY27, with the company likely to deliver growth at the higher end among IT peers.