LTIM - Investment Analysis

Last Updated Time : 02 Aug 25, 12:58 am

📊 Investment Analysis: LTIMindtree Ltd (LTIM)

Investment Rating: 3.5

LTIMindtree is a fundamentally strong IT services company with excellent capital efficiency and low debt. However, its high PEG ratio and premium valuation suggest limited upside in the near term. It’s best suited for long-term investors who prioritize stability and quality over aggressive growth.

✅ Why It’s a Long-Term Candidate

Profitability & Efficiency

ROE (21.5%) and ROCE (27.6%) → top-tier capital efficiency.

EPS (₹159) → strong earnings base.

Quarterly PAT Growth (10.6%) → consistent performance.

Valuation

P/E (31.8) > Industry P/E (29.1) → trading at a premium.

PEG Ratio (6.10) → indicates overvaluation relative to growth.

Price-to-Book (≈6.6) → expensive compared to historical norms.

Financial Stability

Debt-to-Equity (0.10) → virtually debt-free.

Dividend Yield (1.29%) → modest but reliable.

Technical Signals

RSI (39.7) and MACD (-42.4) → bearish momentum.

Volume below average → waning investor interest.

🎯 Ideal Entry Price Zone

Based on DMA and support levels

Entry Zone: ₹4,800–₹5,000

₹5,000 is near current price and below 50 DMA (₹5,177), offering value.

₹3,802 is the 52-week low — deep value zone if sentiment weakens.

Avoid entry above ₹5,300 unless bullish breakout confirms.

🧭 Exit Strategy / Holding Period

If you already hold LTIM

Holding Period: Minimum 3–5 years to benefit from compounding ROE and sector resilience.

Exit Strategy

Partial Exit near ₹6,700–₹6,800** if price approaches ATH and valuation stretches.

Full Exit if PEG remains elevated and growth slows below 10% CAGR.

Trailing Stop Loss: Consider placing it around ₹4,750 to protect downside.

⚠️ Risks to Monitor

PEG Ratio (6.10) → growth may not justify current valuation.

FII Holding Decline (-0.38%) → institutional sentiment weakening.

Bearish Technicals → RSI and MACD suggest caution.

Would you like a comparison with other IT mid-caps or a valuation model to project future returns?

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