LTIM - Fundamental Analysis: Financial Health & Valuation
Back to ListFundamental Rating: 4.3
| Stock Code | LTIM | Market Cap | 1,80,124 Cr. | Current Price | 6,070 ₹ | High / Low | 6,430 ₹ |
| Stock P/E | 35.2 | Book Value | 758 ₹ | Dividend Yield | 1.07 % | ROCE | 27.6 % |
| ROE | 21.6 % | Face Value | 1.00 ₹ | DMA 50 | 6,001 ₹ | DMA 200 | 5,638 ₹ |
| Chg in FII Hold | 0.11 % | Chg in DII Hold | 0.23 % | PAT Qtr | 1,353 Cr. | PAT Prev Qtr | 1,386 Cr. |
| RSI | 51.3 | MACD | -23.8 | Volume | 1,75,058 | Avg Vol 1Wk | 2,06,789 |
| Low price | 3,802 ₹ | High price | 6,430 ₹ | PEG Ratio | 8.08 | Debt to equity | 0.10 |
| 52w Index | 86.3 % | Qtr Profit Var | 29.9 % | EPS | 158 ₹ | Industry PE | 23.9 |
📊 Financials: LTIMindtree demonstrates strong fundamentals with ROCE at 27.6% and ROE at 21.6%, reflecting excellent capital efficiency. Debt-to-equity ratio of 0.10 indicates negligible leverage, ensuring financial stability. Quarterly PAT declined slightly from 1,386 Cr. to 1,353 Cr., but overall profit variation (+29.9%) highlights robust year-on-year growth. Cash flows remain healthy, supported by consistent profitability and operational efficiency.
💹 Valuation: Current P/E of 35.2 is higher than industry average (23.9), suggesting premium valuation. P/B ratio (~8.0) is elevated, while PEG ratio of 8.08 indicates expensive growth-adjusted valuation. Intrinsic value analysis suggests entry opportunities around 5,850–6,000 ₹, offering margin of safety compared to current price (6,070 ₹).
🏢 Business Model & Advantage: LTIMindtree operates in IT services and consulting, serving industries such as BFSI, retail, manufacturing, and telecom. Its competitive advantage lies in digital transformation expertise, global client base, and strong innovation capabilities. Market cap of 1,80,124 Cr. positions it as a large-cap IT services leader with resilience and growth potential.
📈 Entry Zone & Holding Guidance: Attractive entry zone: 5,850–6,000 ₹. Long-term investors may hold given strong fundamentals, negligible debt, and sector tailwinds. Technical indicators (RSI 51.3, MACD negative) show neutral-to-weak short-term momentum, but long-term outlook remains positive due to demand in IT services.
Positive
- High ROCE (27.6%) and ROE (21.6%) highlight superior efficiency.
- Debt-to-equity ratio of 0.10 ensures strong balance sheet.
- Quarterly PAT growth (+29.9% YoY) indicates earnings momentum.
- DII holding increased (+0.23%) and FII holding increased (+0.11%), showing institutional confidence.
- Strong positioning in IT services and digital transformation.
Limitation
- High P/E (35.2) compared to industry average (23.9) suggests overvaluation.
- Elevated P/B ratio (~8.0) indicates expensive price relative to book value.
- PEG ratio (8.08) reflects weak growth-adjusted valuation.
- Dividend yield of 1.07% is modest, limiting income appeal.
- Stock trading below DMA 50 (6,001 ₹) and DMA 200 (5,638 ₹) signals technical weakness.
Company Negative News
- Weak technical indicators (MACD -23.8) show bearish momentum.
- Slight decline in quarterly PAT (1,386 Cr. to 1,353 Cr.) highlights margin pressure.
Company Positive News
- Institutional inflows (FII +0.11%, DII +0.23%) reflect investor confidence.
- Strong YoY profit growth (+29.9%) highlights resilience.
Industry
- Industry P/E at 23.9 indicates moderate valuation levels.
- IT services sector benefits from global digital transformation demand.
- Companies with diversified client base and innovation capabilities hold competitive advantage.
Conclusion
⚖️ LTIMindtree demonstrates robust fundamentals with excellent return metrics, negligible debt, and strong profit growth. Despite premium valuation and weak PEG ratio, the company remains a resilient large-cap IT services player. Entry around 5,850–6,000 ₹ is recommended for long-term investors, with cautious monitoring of technical trends and valuation levels.