INSUBCONTINENT EXCLUSIVE:
NEW DELHI: Shares of IT player Mindtree plunged over 10 per cent to hit their 52-week low of Rs 675.05 in Thursday's session, a day after it
posted a 41.4 per cent decline in consolidated net profit at Rs 92.7 crore for the June quarter.
The company had reported a net profit of Rs
158.2 crore in the corresponding period of the previous financial year.
However, revenue rose 11.9 per cent to Rs 1,834.2 crore in the June
2019 quarter as compared with Rs 1,639.5 crore in the year-ago period.
Motilal Oswal Securities maintained a 'neutral' view on the stock
with a target price of Rs 750.
"Our revised target price of Rs 750 discounts forward earnings by 15 times, against 16 times earlier, amid
concerns over profitability and leadership transition," said the brokerage
Taking into account the significant profit miss in Q1FY20 and the management commentary on the Ebitda margin, the brokerage cut Ebit margin
estimates by 240bp for FY20 and FY21
"This drives an earnings cut of 20 per cent and 17 per cent for FY20 and FY21
Our revenue estimates are largely unchanged
Over FY19-21, we expect CC revenue CAGR of 11.4 per cent and earnings CAGR of 6 per cent," Motilal Oswal added.
Kotak Institutional Equities
retained 'reduce' call on the stock with a target price of Rs 725
It cut the earnings per share (EPS) estimate by 15-21 per cent due to pricing pressure revised currency assumption
BNP Paribas, too, maintained 'reduce' recommendation on the stock, cutting the target price to Rs 670 from Rs 810 earlier.
Shares of
Mindtree traded 5.11 per cent down at Rs 713.55 around 9:55 am on BSE