Order pipeline to keep LTIMindtree in good books

LTIMindtree stock is up 18% in the past three months, outperforming the 11% gain in the ET Infotech Index. The country’s sixth largest software exporter by annual revenue and fifth largest by net profit reported robust 22% year-on-year growth in new order bookings in the September quarter. Given the pipeline of large deals, the momentum is expected to continue in the second half of the fiscal. Analysts have raised the price target by about 15%.With $1.6 billion in new project contracts in the July-September period, the company’s order bookings exceeded $1.5 billion for the fourth consecutive quarter, driven by new deals in digital transformation and artificial intelligence (AI) in major vertical markets.

The company is showing slower growth in banking, financial services and insurance (BFSI), which contributed 36% to revenue in the September quarter. It reported modest sequential growth of 0.2%. The vertical sector’s revenue share also fell from 37% in the June quarter. In addition, the contribution of the top five customers fell to 25.3% from 27.3% in the previous quarter. The company attributed these two trends to the recalibration of revenues from the BFSI vertical and its top five customers due to improved productivity due to its AI initiatives. Management believes this is a transitional phase and not a structural shift and expects these accounts to grow in the future.

Revenue grew 2.3% sequentially to $1,180.1 million in the September quarter. In rupee terms, revenue grew 5.6% from the quarter ago to ₹10,394.3 crore, the sixth consecutive quarter of growth. Sales also crossed ₹10,000 crore for the first time. Net profit grew 10% sequentially to ₹1,381.2 crore. Operating margin (Ebit margin) improved by 160 basis points sequentially to 15.9% in the September quarter due to the company’s efforts to streamline operations, absence of visa fees and favorable currency movements. “The company’s continued initiatives to improve efficiency, coupled with further expansion, indicate a profitability trend in the coming quarters, despite planned wage increases in the second half of FY26,” Axis Securities said. The brokerage firm has increased the share price from ₹5,585 to ₹6,250.

Elara Securities has maintained an ‘accumulate’ rating on the stock, citing a stable management team focused on growth. “We are raising our earnings estimates by 4-7% during FY26 and FY27 to account for the strong growth in the first half of FY26 and the future margin expansion programme,” the brokerage firm said in a report. It has increased the target price from ₹5,500 to ₹6,320. On Wednesday, the stock closed at ₹6,161 on the BSE.