Rs 20/Share Dividend: Largecap IT Stock To Trade Ex-Dividend On October 27; Time To Buy?

Largecap IT stock, LTIMindtree will be in focus during this week's trading sessions as the share price will turn ex-dividend on October 27 for a dividend payout of Rs 20 per share. LTIMindtree is a global technology consulting and digital solutions company that enables enterprises across industries to reimagine business models, accelerate innovation, and maximize growth by harnessing digital technologies.

Last week, on Friday, LTIMindtree share price ended at Rs 5416.80 apiece, down by 0.74% on BSE.

On October 18, LTIMindtree said that delivered an interim dividend of Rs 20 per equity share of Re 1 each. The company said that the interim dividend shall be paid within 30 days of declaration to those shareholders whose name will appear in the Register of Members or in the list of Beneficial Owners provided by the Depositories as of Friday, October 27, 2023, being the 'Record Date' fixed for the purpose.

That being said, LTIMindtree will also turn ex-dividend on October 27.

In the financial year FY23, the company paid an eye-bulging 6000% dividend amounting to Rs 60 per share to its shareholders.

Currently, LTIMindtree has a dividend yield of 1.16%.

During the September 2023 quarter, this L&T Group-backed company earned a net profit of Rs 1,161.8 crore on a consolidated, registering a fractional growth of 0.9% sequentially but a drop of 2.5% year-on-year. Consolidated revenue, meanwhile, stood at Rs 8,905.4 crore in Q2FY24, rising by 2.3% quarter-on-quarter and 8.23% year-on-year.

Should you buy or sell or hold LTIMindtree shares?

Emkay Global said, "The demand environment is still challenging amid cautious client spending and delayed decision-making. Clients continue to prioritize higher-RoI projects, with efficiency and cost takeout deals continue to gain share. Despite weak discretionary spending, prevailing uncertainty and anticipated higher-than-usual furloughs in Q3, Mgmt remains confident of delivering a better H2 performance (sequential growth better than in H1), backed by ramp-up of deals, sustained momentum in deal activity, expected broad-based recovery, and a strong pipeline."

Thereby, Emkay added, "We cut FY24-26E EPS by 1.5%-1.7%, factoring-in the Q2 performance and higher-than-anticipated furloughs in Q3. We maintain HOLD on the stock, given rich valuations, with revised TP of Rs5,500/share (earlier Rs5,600/share) at 25x Sep-25E EPS."

Meanwhile, Motilal Oswal in its note said, "LTIM, as a combined entity, has deep domain capabilities, strong partnerships with hyperscalers, and a robust sales engine, which will result in industryleading growth rates. We expect a USD revenue CAGR of 11.0% over FY23-25, which is at the top end of our Tier-I IT Coverage Universe. We see a PAT CAGR of 16% over FY23-25E." It added, "We value the stock at 26x FY25E EPS. We reiterate our Neutral rating with a TP of INR5,350."

On the contrary, Kotak Institutional Equities added, "Despite seeming positive, we cut our FY2024-26E revenue estimates by 1.1-2.4%. This is largely down to high expectations, courtesy its aggressive guidance at the beginning of the year. Growth will be better than larger peers. We forecast a c/c revenue growth rate of 5.8% in FY2024 and low teens in the subsequent years. We keep our margin estimates unchanged and tone down our FX gain assumption. Our Fair Value of Rs5,350 implies a multiple of ~24X on September 2025E EPS. The LTIM stock has underperformed and trades at more realistic, albeit full valuations of 26X FY2025E EPS. We maintain a REDUCE rating."

Disclaimer:

The recommendations made above are by market analysts and are not advised by either the author nor Greynium Information Technologies. The author, nor the brokerage firm nor Greynium would be liable for any losses caused as a result of decisions based on this write-up. Goodreturns.in advises users to consult with certified experts before making any investment decision.