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LTIM - Fundamental Analysis: Financial Health & Valuation
Last Updated Time : 20 Dec 25, 11:15 pm
Back to Fundamental ListFundamental Rating: 4.1
| Stock Code | LTIM | Market Cap | 1,83,168 Cr. | Current Price | 6,178 ₹ | High / Low | 6,380 ₹ |
| Stock P/E | 38.1 | Book Value | 758 ₹ | Dividend Yield | 1.06 % | ROCE | 27.6 % |
| ROE | 21.6 % | Face Value | 1.00 ₹ | DMA 50 | 5,898 ₹ | DMA 200 | 5,496 ₹ |
| Chg in FII Hold | -0.22 % | Chg in DII Hold | 0.47 % | PAT Qtr | 1,386 Cr. | PAT Prev Qtr | 1,297 Cr. |
| RSI | 63.5 | MACD | 126 | Volume | 3,35,576 | Avg Vol 1Wk | 2,65,235 |
| Low price | 3,802 ₹ | High price | 6,380 ₹ | PEG Ratio | 8.75 | Debt to equity | 0.10 |
| 52w Index | 92.2 % | Qtr Profit Var | 13.6 % | EPS | 162 ₹ | Industry PE | 26.4 |
📊 Core Financials
- Quarterly PAT increased from ₹1,297 Cr. to ₹1,386 Cr. (+13.6% growth).
- ROCE at 27.6% and ROE at 21.6% indicate strong efficiency and profitability.
- Debt-to-equity ratio at 0.10 shows negligible leverage and a healthy balance sheet.
- EPS at ₹162 reflects strong earnings power.
💹 Valuation Indicators
- P/E Ratio: 38.1 (above industry PE of 26.4, suggesting premium valuation).
- P/B Ratio: ~8.1 (CMP ₹6,178 / Book Value ₹758).
- PEG Ratio: 8.75 (high, indicating stretched valuation relative to growth).
- Intrinsic Value: CMP appears above fair value, limited margin of safety.
🏢 Business Model & Competitive Advantage
- LTIMindtree operates in IT services, digital transformation, and consulting across industries.
- Competitive advantage lies in strong parentage (L&T Group), diversified client base, and digital expertise.
- Focus on cloud, AI, and digital engineering enhances long-term growth prospects.
📈 Entry Zone & Long-Term Guidance
- Entry Zone: Attractive near ₹5,400–₹5,700 (close to DMA 200 at ₹5,496 and below CMP).
- Long-Term Holding: Suitable for investors seeking IT services exposure, though valuations are premium.
✅ Positive
- Strong ROCE (27.6%) and ROE (21.6%) highlight efficiency.
- Low debt-to-equity ratio (0.10) ensures financial stability.
- Quarterly PAT growth of +13.6% shows earnings momentum.
- DII holdings increased (+0.47%), reflecting domestic investor confidence.
⚠️ Limitation
- High P/E (38.1) compared to industry average (26.4).
- PEG ratio at 8.75 indicates stretched valuation relative to growth.
- Stock trading near 52-week high (₹6,380), limiting immediate upside.
📉 Company Negative News
- FII holdings reduced (-0.22%), showing cautious foreign sentiment.
- Premium valuations may limit near-term investor interest.
📈 Company Positive News
- Quarterly PAT rose to ₹1,386 Cr. from ₹1,297 Cr.
- DII holdings increased, showing strong domestic support.
- Strong demand outlook in IT services and digital transformation.
🏭 Industry
- IT services industry benefits from global digital transformation, cloud adoption, and outsourcing demand.
- Industry PE at 26.4, showing LTIM trades at a premium to peers.
🔎 Conclusion
LTIMindtree demonstrates strong fundamentals with high ROCE, low debt, and consistent profit growth. However, valuations are stretched with a high P/E and PEG ratio. Entry is advisable near ₹5,400–₹5,700 for better risk-reward. Long-term investors may benefit from IT services growth, though cautious accumulation is recommended due to premium valuations and limited margin of safety.
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