LTIMindtree Share: This L&T Stock Rallies Over 3% After Q1 Results; Motilal Upgrades To BUY, Target Rs 7,000

Leading infra company, Larsen & Toubro-backed IT giant, LTIMindtree share price witnessed heavy buying on July 18 after the company reported strong first quarter for FY25. Overall, in the day, LTIMindtree share price jumped by at least 3.5% on BSE with an intraday high of Rs 5,776.95 apiece. After Q1 earnings card, brokerage Motilal Oswal upgraded its stance to BUY on LTIMindtree stock, while Prabhudas Lilladher has suggested ACCUMULATE.

On BSE, at the time of writing, LTIMindtree stock surged by 2.90% to trade at Rs 5,723 apiece, with market cap of Rs 1,69,494.30 crore. The stock is couple of hundreds away from hitting 52-week high of Rs 6,442.65 apiece, while its 52-week low is at Rs 4,518.35 apiece.

In Q1FY25, the company posted net profit of Rs 1,135.1 crore, registering growth of 3.1% QoQ, but year-on-year performance was down by 1.5%. However, revenue stood at Rs 9,142.6 crore, registering upside of 2.8% QoQ and 5.1% YoY. In dollar terms, revenue was at $1,096.2 million, up 2.5% QoQ and 3.5% YoY. Net profit in dollars was at $136.1 million, higher by 2.8% QoQ but down by 2.9% YoY.

Debashis Chatterjee, Chief Executive Officer and Managing Director said, "While the environment remains unchanged, fiscal 25 started on a positive note for us with Q1FY25 revenue of USD 1.1 billion, registering a 2.5% QoQ and 3.5% YoY revenue growth in USD terms. Our Q1FY25 EBIT expanded to 15% and order inflow remained stable at USD 1.4 billion."

He added, "Our top 3 industry verticals and our largest geography have performed well sequentially. This is attributed to a measured uptick in IT spending for critical initiatives with clients balancing innovation and fiscal prudence."

BUY/SELL LTIMindtree share price after Q1?

Motilal Oswal On LTIMindtree:

We upgrade LTIM to BUY due to its superior offerings in data engineering and ERP modernization, positioning it well to capture the pre-GenAI expenditures. Further, clients are finally resuming the "high-priority transformation" projects, in these areas. We anticipate LTIM to outperform its large-cap peers and expect low double-digit CC growth for FY26. Margins remain a concern, however, and the biggest risk to our thesis. A re-rating still depends on significant margin recovery, driven primarily by volume recovery.

We expect LTIM to deliver a CAGR of 8.0%/13.4% in USD revenue/INR PAT over FY24-26. We broadly maintain our FY25E EPS and raise our FY26E EPS by 2.8%. We also upgrade our target multiple to 35x (this is now at 1STD above LTIM's fiveyear average). Our revised TP of INR7,000 implies 26% upside potential.

Prabhudas Lilladher on LTIMindtree:

The revenue growth momentum in Q1 was broad-based and was strongly supported by resumption of high-priority transformation programs that were paused earlier by enterprise clients at the onset of adverse macros. These programs are getting further supported by savings that have been generated though recent cost take-outs and productivity deals. Additionally, the uptick in revenue growth was also supported by enterprise investments in laying a core foundation for AI-led initiative with data, governance and security layer.

The management was confident to drive similar growth momentum in 2Q amidst qualified deal pipeline and strong growth visibility for BFS vertical. Having said that, the management also maintained caution on continued slowdown on discretionary programs and project reprioritization. With improving prioritized spends, BFS growth visibility and enterprise urgency to invest in AI-led initiatives, we are revising our revenue growth estimates by +80 bps each in FY25E/FY26E with 6.0% and 9.7% CC.

With strong execution strategy and robust sales engine, LTIM is well positioned to play in the challenging environment with a mix of cost and transformation programs. We are baking in revenue/earnings CAGR of 8.3% and 14.0%, respectively. We believe, the CMP factors-in all the positive and leaving no room for potential upside. It is trading at 27x FY26E (average 10-year 25x PE). We are assigning P/E of 30x to FY26E with a target price of INR 6,040. Maintain ACCUMULATE.

Kotak Institutional Equities On LTIMindtree:

We increase the FY2025-27E US$ revenue by 1-2%. We cut the FY2025-27E EBIT margin estimates by 20-60 bps. We take into account higher hedge rates, leading to higher forex gains, which drive a 0-2% increase in the FY2025-27EEPS. Merger synergy benefits are yet to flow through, in our view. We value the stock at 25X multiple (23X earlier) on September 2026E earnings, leading to a Fair Value of Rs5,500 (Rs4,800 earlier). The stock trades at full valuations. Retain REDUCE.

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