LTIMindtree Limited: Hold Rating Amid Macroeconomic Challenges and Strategic Initiatives

LTIMindtree Limited (LTIM – Research Report), the Technology sector company, was revisited by a Wall Street analyst today. Analyst Rahul Malhotra from Bernstein maintained a Hold rating on the stock and has a INR4,570.00 price target.

Rahul Malhotra has given his Hold rating due to a combination of factors impacting LTIMindtree Limited. The company reported a lackluster quarter, with macroeconomic uncertainties leading to delays in deal ramp-ups, resulting in a slight decline in revenue on a quarter-over-quarter basis. Although there was a year-over-year growth, the EBIT margin remained flat, affected by wage increases, which were only partially offset by improved operational efficiency.
Furthermore, the new CEO, Venu Lambu, has introduced strategic initiatives aimed at enhancing sales effectiveness, executing large deals, and optimizing costs. While these initiatives are expected to position the company for long-term improvement, the recovery is anticipated to be gradual as LTIMindtree works to regain its momentum compared to larger competitors. The mixed performance across various verticals and a reduction in the top client revenue share also contribute to the cautious outlook, leading to the Hold recommendation.

In another report released on April 9, Jefferies also downgraded the stock to a Hold with a INR4,170.00 price target.