LTIMindtree slumps 13%

about 6 months ago
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LTIMindtree is currently the top loser on the BSE; the stock opened 7.5% lower at Rs.5808.55 and went down further to an intraday low at Rs.5436, down 13%, which was just shy of its 15% LC of the day at Rs.5336.05.

The stock is down because the earnings for Q3FY24 were much below media/analysts estimates.

The company’s net profit for the quarter was almost flat, rising just 0.6% (QoQ) at Rs.1169 crore on a 1.2% rise in revenue at Rs.9016 crore.

EBIT margin fell 15.4% v/s 16% sequentially due to high furloughs and low discretionary spends.

The bright spot here – it recorded its highest-ever quarterly deal pipeline at $1.5 billion in Q3. And this is despite the ‘seasonal’ factor. But the market chose to ignore this fact and focussed only on the missed estimates.

What could have really triggered off the sell on the counter, apart from profit booking and overall market mood on the Street is the cautionary road ahead. The management hinted at an overall weak environment into Q4 too and said that the Q4FY24 EBIT target of 17-18% might now get pushed down by a few quarters more as it expects furloughs in Q4 too along with investments in business and deal ramp-ups. FY25 margin target of 17–18 per cent too has been pushed out to ‘medium term.

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