Hold Mindtree; target of Rs 1080: Arihant Capital
Arihant Capital’s research report on Mindtree
Mindtree came out with good set of numbers in Q4FY19, PAT was ahead of our estimate though revenue & EBITDA were below our estimate. Revenue grew 25.6% YoY to Rs 18,394mn against our estimate of Rs 18,870mn. EBITDA stood at Rs 2803mn against our estimate of Rs 3270mn. PAT for the quarter stood at Rs 1984mn ahead of our estimate of Rs 1820mn. We are positive on the stock from longer term perspective, however due to ongoing news flow regarding stake sale/open offer activities, not much clarity is there for continuity of current management. To factor in this uncertainty we have lowered our target P/E multiple to 17.5x from 18.5x earlier, though we have kept our estimates for FY20E/FY21E unchanged.
We change our rating from Buy to Hold with a revised target price of Rs 1080.
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