Should you buy Mindtree shares post Q1 results?
In Q1 FY22, Mindtree reported the highest ever order book of half a billion US dollars, registering a growth of 34.2% QoQ
Analysts retained their mixed view on Mindtree despite its posted better-than-expected financial results for the quarter ended June 30. The company on Tuesday after market hours reported an 8.2% growth in net profit to Rs 343.40 crore on an 8.6% rise in revenues to Rs 2,291.70 crore in Q1 FY22 over Q4 FY21. In dollar terms, the IT firm posted a 7.5% rise in consolidated net profit to $46.5 million on a 7.7% increase in revenues to $310.5 million in Q1 FY22 over Q4 FY21.
Shares of the company traded 8% higher at Rs 2694 at around 10.30 am (IST). On the other hand, the benchmark BSE Sensex was down 63 points, or 0.12%, at 52,706 at around the same time. EBITDA in Q1 FY22 rose 0.4% to Rs 464.50 crore as against Rs 462.60 crore posted in Q4 FY21.
In Q1 FY22, Mindtree reported the highest ever order book of half a billion US dollars, registering a growth of 34.2% QoQ. The total active clients at the end of June 2021 stood at 260, down from 270 clients at the end of March 2021. Debashis Chatterjee, CEO and MD of Mindtree said, We are pleased to report a strong start to FY22 with broad-based first-quarter growth across all service lines and industry segments.”
Should you buy?
Brokerage YES Securities has an ‘Add’ call on Mindtree with a price target of Rs 2,496. “Deal win momentum remained strong as total contract value (TCV) for the quarter grew by 34% QoQ led by strong deals wins in digital, cloud and data. TTM book to bill ratio of 1.4 times provides strong revenue visibility for FY22,” YES Securities said adding the newly launched healthcare segment is a step in the right direction.
On the other hand, Nirmal Bang Securities has a ‘Sell’ call on Mindtree with a price target of Rs 2,316. “We think the 150% stock returns in the last 12 months largely capture the improvement in earnings, driven by the extra-ordinary margin expansion,” the brokerage said.
Mindtree is a global technology consulting and services company. It is now a Larsen & Toubro Group company.
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