LTIMindtree Ltd is the Stock of the Week
ABOUT
Welcome to our Stock of the Week series, where we dive into the fundamental analysis of companies to provide insights into their financial health and investment potential.
In this edition, we explore LTIMindtree (LTIM), shedding light on key fundamentals that investors should consider when evaluating this stock.
Join us on this journey of dissecting LTIMindtree’s financials to make informed investment decisions.
LTIMindtree stands out as a pioneering technology consulting company, dedicated to facilitating transformative journeys for businesses.
Their expertise spans from core operations to enriching user experiences, empowering enterprises to flourish in the evolving marketplace.
Fueled by a distinctive fusion of engineering and experience DNA, LTIMindtree accelerates the path to the future for businesses, ensuring a swift and effective transition.
Larsen & Toubro Infotech Ltd offers extensive range of IT services like application development, maintenance and outsourcing, enterprise solutions, infrastructure management services, testing, digital solutions, and platform-based solutions to the clients in diverse industries.[1]
KEY POINTS
Merger with Mindtree
LTI and Mindtree Ltd (Mindtree), on May 06, 2022, announced the proposal to merge Mindtree into LTI through a scheme of amalgamation as approved by the respective boards of the companies.
The shareholders of Mindtree will receive 73 shares of LTI (face value of Rs 1 each) in exchange for 100 shares of Mindtree (face value of Rs 10 each)
Service Offerings from Stock of the Week
The company provides a wide range of IT services such as application development maintenance (ADM), enterprise solutions, infrastructure management services, testing, analytics & artificial intelligence.[2]
Revenue Breakup H1FY24
Verticals
Banking, Finance Services & Insurance – 36.5%
Manufacturing & Resources – 17.9%
Hi-Tech, Media & Entertainment – 23.8%
Retail, CPG, Travel, Transport & Hospitality – 15.3%
Healthcare, Life Sciences & Public Services – 6.5%
Geographical Split of Stock of the Week
North America: 73.4%
Europe: 15.3%
ROW: 11.3%
Services offered by Stock of the Week LTIM
ADM & Testing – 34%
Enterprise Solutions – 31%
Cloud Infra & Security – 14%
Analytics, AI & Cognitive – 12%
Enterprise Integration & Mobility – 9%
Geographical Presence of Stock of the Week LTIM
Company has a presence in 30+ countries across 5 continents.
Client Concentration
As of H1FY24, company has 700+ clients. Its top 5 clients contributed 26.8% of revenues, top 10 34.3% and top 20 45.2% of revenues. 14 clients contributed $50 mn+ revenue.
Employee Profile
As of H1FY24, company has an employee base of ~83,000 employees globally.
Acquisitions
In FY22, company acquired Cuelogic for an enterprise value of $8.4Mn
In the past, the company has acquired various startups & companies such as augment IQ, syncordis, Ruletronics, lymbic, Powerup, N+P & cuelogic to increase its business and gain strategic advantage.
Strategic Alliances
The company has strategic alliances with Microsoft, SAP, Oracle, Google, AWS, IBM, CISCO, Dell, Adobe, HP, PEGA etc.
Branch Office in South Korea
In Oct 2023, company opened a branch office in South Korea for expansion.
Fundamentals of LTIMindtree (LTI)
Stock of the Week LTIMindtree is a stock with a current market price (CMP) of Rs. 6237.05. It has a Price/Earnings (P/E) ratio of 41.72, indicating the market’s expectation for future earnings growth. The market capitalization stands at Rs. 184,718.57 crore.
With a Dividend Yield of 0.96%, LTIMindtree offers a modest dividend return. The Net Profit for the quarter is Rs. 1162.30 crore, showcasing robust performance. The Return on Capital Employed (ROCE) is noteworthy at 37.72%, reflecting efficient use of capital.
The Debt to Equity ratio is low at 0.10, indicating a favorable financial structure with minimal reliance on debt. Return on Equity (ROE) is strong at 28.55%, indicating effective utilization of shareholder funds.
The Earnings per Share (EPS) for the last 12 months is Rs. 149.65, showcasing profitability. The company has demonstrated a Sales Variance of 35.34%, indicating growth in revenue over the past five years.
In terms of Profit Variance over the last 5 years, LTIMindtree has shown a positive trend of 31.72%. The 5-year return stands at 29.25%, showcasing consistent performance.
Operating Profit Margin (OPM) is at a healthy 17.89%, indicating effective cost management. The company has a Payout Ratio of 40.29%, signifying a balanced approach between rewarding shareholders and retaining earnings.
The CMP to Book Value (BV) ratio is 10.22, suggesting a reasonable valuation. Return on Assets (ROA) for the last 12 months is at 20.02%, reflecting efficient asset utilization. Overall, LTIMindtree appears to be a well-performing stock with positive financial indicators.
Conclusion: LTIMindtree is most innovative Indian multinational company in the present times, it has diverse reach and cutting edge technology to make a mark in new age tech-based businesses.
Source: Screener.in
Disclaimer: This is just the part of knowledge sharing and there is no advice on the stock to buy or sell. Do consult with your financial advisor.