Mindtree shares decline post robust q4 numbers; here is what brokerages suggest investors should do with this counter

Shares of Mindtree fell nearly 3% on Tuesday despite the IT firm reported a 49% jump in net profit in the quarter ended March 31. Shares of this IT firm dropped 2.6% to Rs 3858 a share in the early trade on the BSE as the company said it has registered a 49.1 per cent jump in its consolidated net profit at Rs 473.1 crore in the fourth quarter against Rs 317.3 crore in the same period of the previous fiscal. Mindtree has given a robust return of over 85% in the last one year as on April 19.  

ICICI Securties on Mindtree

Post strong q4 results, brokerage house ICICI Securities has maintained a hold rating with target price of Rs 4167 per share.  

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"We are impressed by Mindtree (MTCL) consistency and disciplined execution on profitability, and believe it is moving from discrete initiatives to transformation at scale which increases cross-selling opportunities with clients. We value MTCL at 32x on FY24E EPS of Rs130 to arrive at a TP of Rs4,167. Maintain HOLD," it said.  

Motilal Oswal on Mindtree

Motilal Oswal maintained a neutral rating with a target price of Rs 4,230 per share.  

"The management’s increased focus on annuity revenue and strategic accounts is reflected in its revenue and client mix.  A strong outlook on strategic accounts, decent deal signings, and the ability to sustain improved margins are key positives. "Our target price of Rs 4,230 per share implies 30x FY24E EPS. We maintain our neutral rating," said Motilal Oswal in its report.  

Prabhudas Lilladher on Mindtree

Prabhudas Lilladher, which cut DCF based target price from Rs 5157 to Rs 4,778, still sees the maximum upside with buy rating. "Mindtree is currently trading at 34x/29x on earnings of Rs 116/135 for FY23/24 respectively with revenue/EPS compound annual growth of 17/16% for FY22-24E. Maintain buy," it said. 

Earlier, Mindtree's consolidated revenue from operations grew by 37.4 per cent to Rs 2,897.4 crore during January-March 2022 from Rs 2,109.3 crore in the corresponding quarter of 2020-21. 
For the financial year 2021-22, consolidated net profit of Mindtree grew by 48.8 per cent to Rs 1,652.9 crore from Rs 1,110.5 crore at the end of financial year 2020-21. 
The consolidated revenue of Mindtree rose to 10,525.3 crore at the end of 2021-22 from Rs 7,967.8 crore a year ago.