On July 18, 2023, LTIMindtree shares fell 3.5% in early trade after the company stated lower earnings for the June quarter and a cautious growth outlook from the management dented investor sentiment.

The recent entrant to the Nifty50 stated a combined net profit of Rs 1,151.5 crore in the first quarter of FY24, marking a 4% upsurge from Rs 1,106 crore a year ago. Sequentially, the bottom line was up 3%.

Revenue for the quarter slipped 14% YoY to Rs 8,702 crore, while it stayed flat successively. However, the topline and bottom line slightly missed the Street estimates of Rs 8,751 crore and Rs 1,209 crore.

EBITDA margin fell to 18.8% from 19.5% in Q1FY23. Moreover, LTIMindree logged total deal wins worth $1.41 billion in the quarter, while it also added 19 more clients to take the complete client count to 723.

At 9:21 am, LTIMindtree shares traded 3.5% lower at Rs 4.960.30 on the NSE.
After the Q1 earnings, the management withdrew from providing the FY24 guidance and approved that double-digit growth seems challenging this fiscal. This note weighed on the stock.

Brokerage firm Citi also assigned a ‘sell’ call for the stock, with a price target of Rs 4,160. The firm highlighted that delays in ramp-ups and hiring freeze in BFSI clients obstructed the Q1 growth.

Despite that, the brokerage house Morgan Stanley retained its ‘overweight’ stance on the stock along with a price target of Rs 5,450.

Aligned with the agreement view, JP Morgan also believes it continues to see delays in deal closures and conversions. Thus, LTIMindtree has revised its margin targets downwards to 17-18% by the current fiscal end. JPMorgan gave an ‘underweight’ rating for IT services with a price target of Rs 3,800.