Mindtree Ltd: Growth Momentum To Stay Intact With Stable Profitability

 

HOLD

CMP: Rs3802  

Target Price: Rs 4300

* At its analyst meet, MTCL reiterated that steady execution of its well-devised '4*4*4 strategy' that focuses on four verticals (RCM, BFSI, TTH and CMT), four service lines (Customer Success, Data and Intelligence, Cloud and Enterprise IT) and four geographies (NA, UK & Ireland, Continental Europe, APAC & ME) has led to superior performance.

* The company has adopted a 3-pronged approach to accelerate growth in the core portfolio (cross-selling in Focused 100 clients, structured deals and M&A), expand the emerging portfolio (expand into newer geographies and services) and incubate new businesses (partnership with start-ups, academia, build PoCs in new areas).

* MTCL is confident to sustain EBITDAM at ~20% and is looking to invest additional savings into strengthening domain capabilities, geographic expansion, industry partnerships and future technologies to be ready for the next leg of digital transformation.

* MTCL has delivered a strong operating performance over the last few quarters, and it expects to sustain the momentum in FY23 on the back of strong broad-based demand. We maintain Hold on the stock with a TP of Rs4,300 at 33x Mar'24E EPS.