Neutral on Mindtree, target price Rs 1550: Motilal Oswal

Motilal Oswal has given a neutral rating to Mindtree with a target price of Rs 1550. The share price moved down by 8.14 per cent from its previous close of Rs 1427.55. The stock’s last traded price is Rs 1311.35.

Mindtree Ltd., incorporated in the year 1999, is a Mid Cap company (having a market cap of Rs 21658.27 Crore) operating in IT Software sector.

Financials
For the quarter ended 30-09-2020, the company reported a Consolidated sales of Rs 1926.00 Crore, up .90 % from last quarter Sales of Rs 1908.80 Crore and up .61 % from last year same quarter Sales of Rs 1914.30 Crore Company reported net profit after tax of Rs 253.70 Crore in latest quarter.

Investment Rationale
The stock is currently trading at 21x FY22E EPS. The stock has been one of the best performers in CY20 in the IT sector, with returns of 77% YTD. It believes the key positives are already captured and see limited upside hereafter. Its TP implies 22x FY22 EPS.

Promoter/FII Holdings
Promoters held 73.49 per cent stake in the company as of June 30, 2020 while FIIs held 10.39 per cent and others 8.24 per cent.