Motilal Oswal is bullish on MindTree has recommended buy rating on the stock with a target price of Rs 1000 in its research report dated April 18, 2018.
Motilal Oswal's research report on MindTree
In FY18, MTCL's revenue grew by 8.6% YoY to USD847m, EBITDA by 3.1% YoY to INR7.4b and PAT by 29% YoY to INR5,701m. Excluding the one-offs from the reversal of acquisition liabilities, PAT grew 19.6% YoY to INR5,007m. However, the exit to the year was far healthier on the operational front, with USD revenue up 15.6% YoY to USD226m, EBITDA up 26% YoY and PAT up 87% YoY to INR1,822m. QoQ revenue grew 5.5% v/s our estimate of 4.3%. EBITDA margin expanded 100bp QoQ to 16.1%, largely in line with our estimate of 15.9%.
Outlook
We expect a CAGR of 14% in USD revenue and 29% in earnings over FY18-20. This brings MTCL in the league of well-performing tier-II IT peers like LTI, MPHL and HEXW (their average multiples discount FY20E earnings by 18x). Pegging MTCL's multiple at the same level, we upgrade our TP to INR1,000 (15% upside). Maintain Buy.For all recommendations report, click here
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