BackMindtree shares slip post Q4 results. Should you buy, sell or hold?
Mindtree's Q4 revenue grew 37.4% year-on-year (YoY) and 5.4% on a sequential basis to ₹2,897 crore
PremiumShares of Mindtree slipped nearly 2% to ₹3,888 apiece in Tuesday's opening deals on the BSE after the IT company registered a 49% from a year earlier jump in its consolidated net profit at ₹473 crore in the fourth quarter. The Bengaluru-based software services firm's revenue grew 37% year-on-year (YoY) and 5.4% on a sequential basis to ₹2,897 crore.
“Mindtree reported strong revenue growth of 5.2% QoQ CC in-line with our and above cons estimates, led by broad-based growth across most verticals. The company delivered industry leading organic growth. Strong headcount addition of 47% YoY in FY22 also indicates strength in demand," said analysts at Prabhudas Lilladher. The brokerage has a Buy rating on Mindtree shares with a target price of ₹4,778.
Revenue in dollar terms was at $383.8 million, up 4.8% sequentially, and 33.2% from a year earlier. Meanwhile, the firm’s attrition rate for the March quarter, on a trailing 12-month basis, rose to 23.8% from 21.9% in the preceding quarter.
"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 margin are key positives. As the key positives are already captured, we see limited upside hereafter," said Motilal Oswal. It has a Neutral rating on the IT stock with target price of ₹4,230.
Considering rich valuations, brokerage Emkay has maintained Hold rating on the stock with a target price of ₹4,400 per share (from ₹4,300 earlier).
“The company is confident about maintaining revenue growth momentum and delivering top quartile growth in FY23 while sustaining EBITDAM over 20% on the back of broadbased revenue growth, strong deal wins, and a healthy deal pipeline," Emkay added.
The views and recommendations made above are those of individual analysts or broking companies, and not of Mint.
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