In the first hour of trading on Friday, shares of Mindtree Ltd rose more than 4% to ₹3,440 per share on the BSE after the IT business announced a consolidated net profit increase of 27.5% year over year (YoY) to ₹508.7 crore for the September quarter. The profit was nearly 8% more than the prior quarter when viewed sequentially.
The Q2 revenue was around ₹3,400 crore, up 9% from the prior sequential quarter and 31.5% from the prior year. In the first half of the fiscal year, the total contract value, or TCV, for the first time exceeded USD 1 billion. According to Debashis Chatterjee, chief executive officer and managing director of Mindtree, the firm had a strong first half of the year as a result of its strong performance in the second quarter of FY23.
“The business keeps up its multi-pronged approach of combining service lines, making steady investments, concentrating on securing multi-year engagements, and scaling up top accounts that would help in sales traction going forward. We think Mindtree’s business model is robust, and it has a history of consistently demonstrating its ability to execute well “While proposing a Buy rating on the midcap IT company with a target price of ₹3,720 per share, local brokerage and research firm Axis Securities.
Mindtree had its eighth quarter of sequential growth of 5% or more. The management stated that the pipeline is still strong and that they are optimistic in maintaining the trend. TCV was ₹518 million, crossing ₹1 billion for the first time in H1 TCV.
The firm, which is in the process of merging with group subsidiary L&T Infotech, also said that attrition in the last year dropped to 24.1% from 24.5% in the first quarter but was still higher than the 17.7% it registered in the previous year.
The merger of Mindtree with LTI is going well, and management expects it to be finished by the end of the year. We think a seamless interface between them can significantly increase cross-selling potential. TCV and overall growth were robust “According to another brokerage Edelweiss, the consensus rating on Mindtree shares remains “Buy,” with a target price of ₹3,972 per share.
