Buy MindTree; target of Rs 1680: ICICI Direct

ICICI Direct's research report on MindTree

MindTree reported 3.1% QoQ growth in dollar revenues, mainly led by higher growth in BFSI and retail and CPG & manufacturing. Further, cost efficiency and higher utilisation led margins to improve 340 bps QoQ to 20.3%. The board has recommended a dividend of Rs 7.5 per share.

Outlook

MindTree’s aim to improve margins via employee pyramid, offshoring, pricing, utilisation and annuity business bodes well for profit growth. Based on these factors, we revise our EPS and multiple upwards and maintain BUY with a revised target price of Rs 1680/share (22x FY23E EPS).

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