LTIM - Investment Analysis: Buy Signal or Bull Trap?
Back to ListInvestment Rating: 4.0
| Stock Code | LTIM | Market Cap | 1,78,507 Cr. | Current Price | 6,027 ₹ | High / Low | 6,430 ₹ |
| Stock P/E | 34.9 | Book Value | 758 ₹ | Dividend Yield | 1.08 % | ROCE | 27.6 % |
| ROE | 21.6 % | Face Value | 1.00 ₹ | DMA 50 | 6,002 ₹ | DMA 200 | 5,646 ₹ |
| Chg in FII Hold | 0.11 % | Chg in DII Hold | 0.23 % | PAT Qtr | 1,353 Cr. | PAT Prev Qtr | 1,386 Cr. |
| RSI | 50.3 | MACD | -20.2 | Volume | 1,75,096 | Avg Vol 1Wk | 1,90,893 |
| Low price | 3,802 ₹ | High price | 6,430 ₹ | PEG Ratio | 8.00 | Debt to equity | 0.10 |
| 52w Index | 84.6 % | Qtr Profit Var | 29.9 % | EPS | 158 ₹ | Industry PE | 25.1 |
📊 Analysis: LTIMindtree (LTIM) shows strong fundamentals with ROE at 21.6% and ROCE at 27.6%, reflecting excellent capital efficiency. The company is nearly debt-free (Debt-to-equity 0.10), ensuring financial stability. Valuations are on the higher side (P/E 34.9 vs Industry P/E 25.1), and the PEG ratio of 8.00 suggests growth is priced expensively. Dividend yield at 1.08% provides modest income support. Technically, the stock is trading near its 50 DMA (6,002 ₹) and above its 200 DMA (5,646 ₹), showing medium-term strength. RSI at 50.3 is neutral, while MACD (-20.2) indicates mild bearishness. Quarterly PAT declined slightly but YoY profit variation (+29.9%) highlights strong growth momentum.
💰 Ideal Entry Price Zone: Between 5,800 ₹ – 6,000 ₹ (near support levels and fair valuation zone). Accumulation is advisable in this range for long-term investors.
📈 Exit Strategy / Holding Period: If already holding, maintain a long-term horizon (3–5 years) given strong ROE/ROCE and industry positioning. Consider partial profit booking if price revisits 6,300–6,400 ₹ levels. Long-term investors should hold for compounding returns, while monitoring valuation and earnings growth sustainability.
✅ Positive
- High ROE (21.6%) and ROCE (27.6%) show excellent efficiency.
- Low debt-to-equity ratio (0.10) ensures financial stability.
- Dividend yield of 1.08% provides modest income support.
- Quarterly profit variation (+29.9%) highlights strong growth momentum.
- DII holdings increased (+0.23%), reflecting domestic institutional confidence.
⚠️ Limitation
- Valuation premium (P/E 34.9 vs Industry 25.1).
- PEG ratio of 8.00 indicates growth is priced expensively.
- MACD (-20.2) signals mild bearish trend.
- Quarterly PAT declined slightly from 1,386 Cr. to 1,353 Cr.
📉 Company Negative News
- FII holdings reduced (-0.11%), showing cautious foreign sentiment.
- Stock corrected from 6,430 ₹ high, showing resistance at upper levels.
📈 Company Positive News
- Strong YoY profit growth (+29.9%).
- DII holdings increased (+0.23%), signaling domestic confidence.
- EPS of 158 ₹ provides a solid earnings base.
🏭 Industry
- IT services and digital transformation sector benefits from global outsourcing demand.
- Industry PE at 25.1, showing LTIM trades at a premium valuation.
- Long-term demand supported by cloud, AI, and digital adoption across industries.
🔎 Conclusion
LTIM is a strong candidate for long-term investment, supported by high ROE/ROCE, low debt, and consistent earnings growth. However, valuations are stretched, and technical indicators show mild weakness. Ideal entry is around 5,800–6,000 ₹. Existing investors should hold for 3–5 years, booking profits near 6,300–6,400 ₹ levels, while monitoring valuation and institutional sentiment.