LTIMindtree shares plunged over 3 per cent in Tuesday’s trade and the latest Nifty entrant was the top loser in the 50-share index after the company reported lower-than-expected results for the April-June quarter.
The stock opened trading at Rs 5,036.05 compared to its previous close of Rs 5,133.95 and fell 3.7 per cent to the level of Rs 4,944.65.
The IT major reported a net profit of Rs 1,151 crore for the first quarter, a growth of 4 per cent year-on-year (YoY). Its revenue from operations surged 14 per cent YoY to Rs 8,702 crore.
Several brokerage firms cut their target price on the stock, PAT, and EPS estimates after the results. However, some still maintained their buy recommendation on the stock as they remain optimistic about the prospects of the merged entity of LTI and Mindtree.
"We have fundamental coverage on LTI Mindtree from a long term point of view and being a Midcap IT company, we believe that the performance wise quarter on quarter number for Midcap IT companies have been better than large cap IT Companies. Return on investment for investors also has performed well in the Midcap IT companies compared to the large cap IT companies," said Gaurang Shah, Senior Vice President at Geojit Financial Services.
"Post the merger i.e L&T Infotech and Mindtree, the company has become very strong in terms of balance sheet in terms of product services, in terms of head and in terms of market capitalization," Shah added.
After the results, JP Morgan remained ‘Underweight’ on the stock while Jefferies has an ‘Underperform’ rating.
Motilal Oswal took ‘Neutral’ stance while Kotak Institutional Equities recommended ‘Reduce’.
Shares of LTIMindtree traded 2.77 per cent lower at Rs 4,997.40 around 1:30 am on the BSE.
