MindTree reported healthy set of Q3FY21 numbers and were above our estimates. The company reported dollar revenue growth of 5.0%QoQ above our estimate of 3.8% QoQ. The company registered EBITDA margin of 23.1% (up 286 bps QoQ mainly led by higher utilization and offshoring) and was higher than our expectation of 20.7%. The deal pipeline increased 3.0% QoQ and 50.7% YoY (due to low base last year) to US$312 million. The company added 368 employees in the quarter, its utilization increased by 430 bps QoQ to 83.1% and offshore effort mix increased by 70 bps QoQ to 82.8%.
Valuation & Outlook
MindTree's has seen healthy traction across verticals and clients. Going forward we expect the company to benefit from strong growth in digital technologies, vendor consolidation and multi-year transformation deals. This coupled with healthy margin trajectory bodes well for profit growth. Based on these factors, we maintain our BUY rating with a revised target price of Rs. 1970/share (22x P/E on FY23E EPS) (earlier TP was Rs. 1680).
For details, click on the link below: https://www.icicidirect.com/mailimages/IDirect_MindTree_Q3FY21.pdf
Shares of MINDTREE LTD. was last trading in BSE at Rs.1680.3 as compared to the previous close of Rs. 1660.6. The total number of shares traded during the day was 176604 in over 13549 trades.
The stock hit an intraday high of Rs. 1759.7 and intraday low of 1665.15. The net turnover during the day was Rs. 301668740.