Mindtree - Q4FY22 Result First cut - Reliance Securities

Mr. Mitul Shah, Head of Research at Reliance Securities

Mindtree reported a decent performance in 4QFY22 with EBIT margin coming in at 18.9%, 20bps above our estimate of 18.7%.

# Revenue grew by 5% QoQ/33% YoY in USD to US$384mn, 0.8% below our estimate of US$387mn (consensus US$386mn). Sequential constant currency growth came in at 5.2% vs. our estimate of 5.6%. (consensus 5.5%)

# EBIT grew by 4% QoQ (up 40% YoY) to Rs5.5bn while EBIT margin stood at 18.9% (down 30bps QoQ /up 39bps YoY), 20bps above our and consensus estimate of 18.7%.

# Its net income stood at Rs4.7bn (up 8% QoQ/ up 49% YoY), while adjusted net margin came in at 16.3% vs. our estimate of 15.4%.

Our View: We expect the company to report FY21-FY24E revenue CAGR of 21%, against FY17-FY20 CAGR of 11.8%. The revenue contribution from top clients remained flat QoQ at 24.9% which is high compared to the mid-cap peer group. We believe the risk-reward is unfavorable given its premium valuation. Thus, currently we have SELL rating on the stock with a 1-Yr target price of Rs4,000, valuing the stock at 32x FY24E earnings.

Shares of MindTree Limited was last trading in BSE at Rs. 3960.80 as compared to the previous close of Rs. 4097.15. The total number of shares traded during the day was 64237 in over 8239 trades.

The stock hit an intraday high of Rs. 4004.70 and intraday low of 3834.05. The net turnover during the day was Rs. 251909751.00.

Source : Equity Bulls

Keywords

MindTree INE018I01017 Q4FY22 RelianceSecurities ResultUpdate FirstCut