LTIM - Fundamental Analysis: Financial Health & Valuation

Last Updated Time : 19 Sept 25, 2:16 pm

Fundamental Rating: 4.3

📊 Core Financials & Profitability

Earnings Growth: PAT rose from ₹1,079 Cr to ₹1,297 Cr QoQ, a healthy 17.3% increase. EPS of ₹157 is strong for a ₹5,528 stock.

Return Metrics

ROE: 21.6% and ROCE: 27.6% — excellent, indicating efficient capital deployment.

Debt Profile: Debt-to-equity at 0.10 — very low, enhancing financial resilience.

Dividend Yield: 1.18% — moderate, with consistent payouts.

💸 Valuation Indicators

Metric Value Insight

P/E Ratio 35.3 Slightly above industry PE of 30.0 — premium valuation.

P/B Ratio ~7.5 Elevated relative to book value ₹737.

PEG Ratio 8.10 Highly inflated — suggests valuation far exceeds earnings growth.

🔍 Conclusion: LTIMindtree is richly valued. While fundamentals are strong, the PEG ratio signals caution, especially if earnings growth doesn’t accelerate.

🧠 Business Model & Competitive Edge

Core Operations: LTIMindtree is a leading IT services and consulting firm, offering digital transformation, cloud, and AI-driven solutions across industries.

Strategic Strengths

Strong client base across BFSI, manufacturing, and retail.

High-margin digital offerings and robust IP portfolio.

Institutional sentiment mixed: DII holdings up 0.59%, FII down 0.38%.

Growth Outlook

Analysts forecast a 1-year average target of ₹5,649.78, implying ~7.75% upside

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Sharekhan and Motilal Oswal project targets up to ₹6,200, suggesting ~12%–18% potential

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Simply Wall St notes that LTIM’s earnings growth (13% projected) lags behind market expectations (19%), which may not justify its high P/E

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📉 Technicals & Entry Zone

RSI: 69.8 — nearing overbought territory.

MACD: 69.8 — strong bullish momentum.

DMA Levels: Price above both 50-DMA and 200-DMA — trend strength confirmed.

📌 Suggested Entry Zone: ₹5,200–₹5,300 — near 50-DMA, offering a better margin of safety.

🕰️ Long-Term Holding Guidance

Hold if Invested: Strong fundamentals, low debt, and digital tailwinds support long-term value.

Buy on Dips: Prefer entry below ₹5,300, especially if RSI cools below 60.

Monitor: Margin trends, client diversification, and global IT spending cycles.

You can explore Trendlyne’s analyst consensus and research reports

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or Simply Wall St’s valuation commentary

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for deeper insights. Let me know if you'd like a peer comparison with Infosys or Tech Mahindra next.

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trendlyne.com

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simplywall.st

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