Shares of LTIMindtree rose 7.77 per cent to an intraday high of Rs 6,198.90 on the National Stock Exchange as Kotak Institutional Equities upgraded the stock’s rating along with a favourable legal development. The Karnataka High Court has stayed a Rs 378 crore tax order against the company on charges of non-payment of IGST.Kotak Institutional Equities has upgraded LTIMindtree from ‘Reduce’ to ‘Add’, with a higher target price of Rs 6,200. The brokerage said LTIMindtree is well poised for a strong recovery in revenue growth over the next few years, led by healthy BFS spending, starting from a low in FY24.The brokerage said in its note, “We increase our FY25-FY27E US dollar revenue estimates by 0.5-1 per cent each, which is roughly equivalent to a similar increase in our EPS estimates. We value the stock at 28 times September 2026E earnings (up from 26 times earlier) at a forward value of Rs 6,200 crore as against Rs 5,500 crore earlier.” Kotak has reiterated that LTIMindtree can be a decent long-term investment backed by a strong and consistent EPS growth trajectory.Kotak analysts estimated that LTIMindtree’s dollar revenue growth would rise to 6.5 per cent in FY25 and 11 per cent in FY26 from 4.4 per cent in FY24, led by a pickup in key sectors such as BFSI and high-tech, particularly in the US, where technology spending is expected to rise.He added that LTIMindtree would be well positioned as capital markets, risk and compliance, and core modernisation – seen as fast-growing areas – ramp up. The company would also be at an advantage with consolidation deals in the banking sector, including those with ABSA. While challenges in the retail and manufacturing sectors remain, analysts said these are manageable.Its diversified and scalable clientele across industries, coupled with the company’s capability in areas such as cloud computing, ERP modernization, data analytics, AI, SaaS, and IT operations, puts the company in an enviable position to leverage various IT budgets. Kotak also highlighted that LTIMindtree does not have any BPO business that is impacted by generative AI. Moreover, the company’s positioning as a challenger vendor is increasingly resonating in a market that is seeing increasing acceptance of niche vendors.The company has seen a slowdown in senior management turnover of late, but demand for talent is so high that departures could continue. Kotak said a stable leadership team is needed to achieve revenue synergies from the recently announced merger, adding that the current team remains strong.
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