Buy Mindtree Ltd - Emkay

Reco: BUY
CMP: Rs688
Target Price: Rs800

Retain positive view on inexpensive valuations

We met MindTree management recently. We present below the key takeaways

- Strength in IT Svcs with good traction in Manufacturing and BFSI. No untoward cancellations in PES recently with PES expected to report seq growth in Sep'12 qtr

- Co maintains outlook of 11-14% rev growth for FY13 (4-6% CQGR), however it remains hinged on closure of some large deals. Street (including us) factoring in <11% rev growth

- Company has hired ~250 freshers in Sep'12 qtr. Absorption of fresher offers could get extended by 1-2 qtrs (driven both by lower than earlier est revenue growth/attrition coming down)

- Tweak FY13/14E EPS higher by 10/6% to Rs 76/81 on currency resets. Roll over to FY15E EPS of ~Rs 88 leads raise in TP to Rs 800(V/s Rs 730 earlier). BUY stays.

Source : Equity Bulls

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