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LTIM - Fundamental Analysis: Financial Health & Valuation
Last Updated Time : 05 Nov 25, 7:43 am
Back to Fundamental ListFundamental Rating: 4.0
📊 Financial Overview
- Profitability: PAT rose from ₹1,297 Cr to ₹1,386 Cr QoQ, with a healthy 13.6% profit variation and EPS of ₹162.
- Return Metrics: ROE at 21.6% and ROCE at 27.6% reflect excellent capital efficiency and operational performance.
- Valuation: P/E of 35.1 is above the industry average (29.4), indicating a premium valuation.
- P/B Ratio: With a book value of ₹758 and price of ₹5,682, P/B is ~7.5, suggesting a high valuation multiple.
- PEG Ratio: 8.06 signals overvaluation relative to earnings growth.
- Debt Profile: Debt-to-equity ratio of 0.10 shows strong financial discipline and low leverage.
- Momentum: RSI at 66.0 and MACD at 102 indicate bullish sentiment with strong upward momentum.
🏢 Business Model & Competitive Edge
- LTIMindtree (LTIM) is a leading digital transformation and IT services company formed by the merger of LTI and Mindtree.
- It offers end-to-end services across cloud, data, AI, and enterprise applications to global clients.
- Strong parentage from L&T Group, diversified client base, and digital-first strategy provide long-term competitive advantage.
💡 Entry Zone Recommendation
- Current price is above both DMA 50 (₹5,384) and DMA 200 (₹5,287), indicating strong momentum.
- Suggested Entry Zone: ₹5,500–₹5,600 on dips for accumulation.
- Long-term holding is favorable given robust fundamentals and digital transformation tailwinds.
✅ Positive
- Strong ROE and ROCE indicate superior operational efficiency.
- Low debt-to-equity ratio enhances financial stability.
- Consistent PAT growth and strong EPS performance.
- DII holdings increased by 0.47%, reflecting rising domestic institutional confidence.
⚠️ Limitation
- High P/E and PEG ratios suggest valuation concerns.
- FII holdings declined by 0.22%, indicating cautious foreign sentiment.
- Stock is ~16% below its 52-week high, suggesting prior correction or resistance.
📉 Company Negative News
- FII outflows may weigh on near-term sentiment.
- High PEG ratio indicates earnings may not be growing fast enough to justify valuation.
📈 Company Positive News
- Strong quarterly earnings and margin stability post-merger.
- Momentum indicators suggest continued investor interest and technical strength.
🏭 Industry
- IT services industry benefits from global digital transformation, cloud adoption, and enterprise modernization.
- Industry P/E of 29.4 supports moderate-to-premium valuation for innovation-led players.
🧾 Conclusion
- LTIMindtree is a high-quality IT services firm with strong fundamentals, digital capabilities, and strategic backing.
- Entry near ₹5,500–₹5,600 offers a favorable long-term opportunity.
- Monitor valuation metrics and institutional flows for sustained performance.
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