Brokerage houses divided on Mindtree; see up to 32% upside in share price in one year

Brokerage houses are divided on IT consultant and Software services provider Mindtree. They are of the view that building growth resilience and strong demand outlook as reiterated by the management of this company can help this share gain going forward, however, the IT share can see a limited to over 30% return in 12 months.  

Anand Rathi | Target Price: Rs.5,010 

Trimming the target price from Rs 5,280 to Rs5,010, the brokerage believes that the recent price correction from a 52-week high renders it an attractive bet. Anand Rathi, which upgraded the stock to a buy, is of the view that shares of Mind tree can reach a target price of Rs.5,010 in one year. This translates into an upside of 32% on its previous closing price of Rs 3783.75 a share on the BSE.  

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"Mindtree is moving up the value chain through more service lines incl. consultation (more client mining), widening technology reach (ServiceNow, Google) and diversifying clients (less concentration on Travel). Also, it is focusing on expanding (including tuck-in M&As) operations in Europe and Healthcare," says the brokerage.  

Motilal Oswal |Target Price: Rs 4,050 

Maintaining 'neutral' rating, Motilal Oswal sees a limited upside in this stock. At Friday's closing price of Rs 3783.75 a share on the BSE, Motilal Oswal's target price of Rs 4,050 turns out be around 7%.  

"With a strong performance (+136%) in the last one-year, the key positives are already captured in the valuation. We see limited upside hereafter. We maintain our Neutral rating," says the brokerage house.  

The IT firm on Thursday reported a 9.6% QoQ rise in the consolidated profit at Rs 437.50 crore for the quarter ended December 31, 2021. It posted a profit of Rs 399 crore in the previous quarter ended September 30, 2021.  Its revenue from operation grew 6.3% to Rs 2,750 crore in the period under consideration compared to Rs 2,586 crore posted in September 2021 quarter. 

(Disclaimer: The views/suggestions/advice expressed here in this article are solely by investment experts. Zee Business suggests its readers to consult with their investment advisers before making any financial decision.)