MindTree Ltd - Q1FY21 Result Update - ICICI Securities

MindTree reported 9.0% QoQ dip in dollar revenues, mainly led by 54.5% dip in travel & hospitality revenues. However, cost efficiency, rupee depreciation led margins to improve by 108 bps QoQ to 16.9%. In addition, Mindtree has registered healthy deal pipeline which increased 20.7% YoY.

Valuation & Outlook

We believe the company's strategy to increase the annuity business will provide long term visibility to revenues. In addition, Mindtree's aim to improve margins via employee pyramid, offshoring, pricing, utilisation and annuity business bodes well for profit growth. Further, the company has changed the forex hedging strategy to a three year period, which will provide better PAT margin visibility. Based on these factors, we revise our EPS and multiple upwards and upgrade the stock from HOLD to BUY with a revised target price of Rs. 1160/share (19x FY22E).

For details, click on the link below: https://www.icicidirect.com/mailimages/IDirect_MindTree_Q1FY21.pdf

Shares of MINDTREE LTD. was last trading in BSE at Rs.975.75 as compared to the previous close of Rs. 977.95. The total number of shares traded during the day was 120465 in over 5627 trades.

The stock hit an intraday high of Rs. 1010.95 and intraday low of 963.3. The net turnover during the day was Rs. 118821592.

Source : Equity Bulls

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