LTIMindtree Sees Stock Pressure as Brokerages Turn Cautious Despite 2.6% Profit Growth

LTIMindtree shares witnessed heightened investor pressure during Thursday's trading session after reporting soft Q4 numbers. The IT company reported a net profit figure of Rs 1,128 crore, witnessing a marginal uptick of 2.6% for the quarter ending March. Revenue stood at Rs 9,771.7 crore, just a tad up by 1.1% sequentially but a healthy surge of 9.9% YoY.

At 02:25 pm, LTIMindtree shares were trading at Rs 4,506, down by nearly 0.7% on the National Stock Exchange.

EBIT margins, on the other hand, stood at 13.8% in the quarter under review, largely unchanged from the last quarter but lower than 14.7% recorded in the corresponding quarter of the previous fiscal. While the company did witness "robust order inflow, driven by a significant array of AI-led deal wins", there was a notable delay in the ramp-up of certain projects.

"While management indicated that margin improvement and revenue growth are likely to come from 1QFY26E onwards (as productivity pass-through headwinds in top tech account is over), we think a sharp improvement in margin needs very strong revenue growth. We expect EBIT margins of 14.4-15.4% over FY26-27F vs 14.5% in FY25," Nomura stated in its report.

In the last 6 months, shares of LTIMindtree have witnessed a sharp plunge of nearly 25%, declining from Rs 5,970 (approx.) to Rs 4,517 price level.

What Brokerages Say?

Elara Capital has cut its FY26E/27E revenue estimates within the 5-6% range citing soft growth. "The cut in earnings estimates is steeper (FY26E/27E earnings estimates cut by 9-13%) since we are now building in conservative margin expansion of 70bps in FY25-27E," the brokerage firm pointed out while reducing the target price from Rs 6,430 to Rs 5,180.

The IT company's overall headcount declined by 2,600 in Q4FY25, after a hiring spree witnessed in the previous two quarters, which was largely driven by hopes of a demand recovery.

"We lower our target price to Rs 4,300 (at 22x FY27F EPS) from Rs 4,770 (at 24x FY27F EPS previously) as we acknowledge the rising macro risks. We prefer Infosys in the large-cap India IT services space," Nomura said.