Motilal Oswal is bullish on Mindtree has recommended Buy rating on the stock with a target price of Rs 1260 in its research report dated September 03, 2018.
Motilal Oswal's research report on Mindtree
We attended Mindtree's (MTCL) analyst meet, where the company highlighted its roadmap to maintain leadership in Digital over the medium term and also invest in new areas beyond Digital for long-term sustainable growth. Changing technologies are likely to result in a business-model transformation, and MTCL is expected to take a more solutions- and product-centric approach to its future offerings.
Outlook
We expect USD revenue/EPS CAGR of 16/27% over FY18-21. The stock trades at 18/16x FY20/21E EPS on our revised earnings. MTCL’s strong revenue momentum, in our view, will also help its margins in the quarters to come. As a result, we have increased our price target to INR1,260, which discounts forward earnings by 19x. Peers such as MPHL, HEXW and LTI continue trading in the range of 17-21x FY20E earnings. Maintain Buy.
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