Best of 52-weeks! Mindtree share price hits NEW HIGH amid strong Q1 numbers and deal wins, stock jumps over 9%

The mid-cap information and technology company — Mindtree shares touched a new 52-week high of Rs 2721 per share, soaring over 9 per cent on the BSE intraday trade on Wednesday on the back of strong numbers and the highest ever deals in the first quarter of the financial year 2021-2022. 

Mindtree on Tuesday reported over 8 per cent jump in profit on a sequential basis to Rs 343.4 crore in the June-ended quarter of the financial year 2021-22 as compared to Rs 317.3 crore in Q4 FY21. The company’s year-on-year profit surged over 61 per cent from Rs 213 crore in Q1 FY21. 

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The Q1 revenue of Mindtree rose by 8.6 percent sequentially to Rs 2,291.7 crore, while revenue in dollar terms increased 7.7 percent to $310.5 million during the same period. The company reported the highest ever order book in the quarter of over $500 million.

EBITDA margin stood at 20.3 per cent, down 166 basis points (bps) QoQ, mainly led by headcount addition. The deal pipeline increased 34.2 per cent QoQ (up 28.9 per cent YoY) to US$504 million. 

Mindtree Managing Director and Chief Executive Officer Debashis Chatterjee said in a management commentary, “We are pleased to report a strong start to FY22 with broad-based first-quarter growth across all service lines and industry segments and are confident of doing an industry-leading growth momentum. In fact, this will be the third consecutive quarter with 5 per cent sequential growth.”

Morgan Stanley has an Overweight rating on Mindtree shares, but it points out high multiples and limited EPS estimate upgrades limit absolute upside. It mentions broadening growth profile and improving revenue visibility augur well and sets a target of Rs 2800 per share. 

While Goldman Sachs has a Buy rating on Mindtree with an expectation of 20.5 per cent constant currency revenue growth in FY22. It mentions, strong dollar revenue led by broad-based growth across verticals and sets a price target of Rs 2863 per share.