LTIMindtree Earns 'Buy' from Anand Rathi, Rs 7375 Target Set

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AuthorVihaan Mehta|Published at:
LTIMindtree Earns 'Buy' from Anand Rathi, Rs 7375 Target Set
Overview

Anand Rathi has initiated a 'Buy' rating on LTIMindtree, setting a revised target price of Rs 7,375. The IT major posted a solid Q3FY26 performance, with CC revenue growing 2.4% quarter-on-quarter to $1.21 billion and EBIT margins expanding. The firm sees significant upside potential, driven by multi-year wins in managed services and AI deployments.

LTIMindtree Limited (LTIM) demonstrated resilience in its third quarter of fiscal year 2026, navigating furloughs to deliver a robust performance. The company's constant currency (CC) revenue climbed 2.4% sequentially to $1.21 billion. Simultaneously, earnings before interest and taxes (EBIT) margin saw a 20 basis point expansion to 16.1% quarter-on-quarter. A one-time labour code impact of Rs 5.9 billion was noted.

Looking at deal wins, LTIM's trailing twelve-month (LTM) total contract value (TCV) reached $1.69 billion, marking a 0.6% year-on-year increase. The LTM TCV overall stood at an impressive $6.5 billion, up 12% year-on-year. This growth was fueled by multi-year contracts across critical areas such as managed services, modernization initiatives, cybersecurity, data analytics, and AI agent deployments. Clients are consolidating spending with strategic partners, prioritizing 'run and modernize' programs alongside AI-driven transformations.

Segmental and Regional Performance

Growth was broad-based but notably strong in Manufacturing & Resources, which surged 9.4% sequentially, and Healthcare & Public Services, up 9.9%. Geographically, Europe registered a 3.4% sequential rise, while the Rest of the World (RoW) saw a substantial 14.1% increase. These gains reflect strong execution and increased wallet share within specific client segments.

Outlook and Analyst View

Anand Rathi's research highlights that headwinds impacting the top five clients are primarily attributed to a productivity cycle. This situation is expected to stabilize by the fourth quarter of fiscal year 2026, paving the way for a more growth-oriented business mix. The brokerage firm believes that once this drag dissipates, vendor consolidation will transform from a risk into an opportunity for gaining greater market share.

Consequently, Anand Rathi maintains its 'BUY' rating on LTIMindtree shares. The target price has been revised upwards to Rs 7,375 from Rs 7,081 previously. This new target implies a potential upside of approximately 16.0% from the current market price, signaling strong conviction in the company's future prospects.

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