Consumer Analyst / Channel Surveillance Specialist, Trudence Capital Advisors

Pranav Bhavsar

Consumer Analyst / Channel Surveillance Specialist

Trudence Capital Advisors

Trudence Capital Advisors Private Limited is a SEBI-registered Research Analyst, holding SEBI registration number INH000015747. Our firm is dedicated to providing independent and unbiased research on Indian mid to large-cap companies. Trudence Capital is known for its counter-consensus views, with a focus on forensic research and on-ground primary investigations. Our research approach is thorough, involving detailed analysis of accounting practices and governance, alongside extensive channel checks.

Independent & Unbiased Research

Thematic (Sector/Industry)

<p>For this channel insight, we speak to industry veterans in IT Services and Real Estate with an objective to understand the changing dynamics in the Industry. Our interactions suggest challenging times ahead for IT Services and multiple sectoral dynamics at play in residential real estate.</p>
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<h3>About India Channel Insight </h3>
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<p>Our objective with India Channel Insight is to share snippets from our channel interactions that are part of our research process. These snippets emerging out of these interactions and have been aiding us to generate interesting trade ideas and have often proven to be reliable sources of qualitative alpha.</p>
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For this channel insight, we speak to industry veterans in IT Services and Real Estate with an objective to understand the changing dynamics in the Industry. Our interactions suggest challenging times ahead for IT Services and multiple sectoral dynamics at play in residential real estate.


About India Channel Insight 



Our objective with India Channel Insight is to share snippets from our channel interactions that are part of our research process. These snippets emerging out of these interactions and have been aiding us to generate interesting trade ideas and have often proven to be reliable sources of qualitative alpha.


India Channel Insight | IT Services, Real Estate

External broker reports(aggregated public sources), Axis Direct

Axis Direct

External broker reports(aggregated public sources)

Equity Bottom-Up

<p>We recommend a BUY on the stock and assign 27x P/E multiple to its FY23E earnings of Rs 105.1/share to arrive at a TP of Rs 2,800/share, implying an upside potential of 12% from CMP.</p><div class="content-highlight"><em>Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.</em></div>

We recommend a BUY on the stock and assign 27x P/E multiple to its FY23E earnings of Rs 105.1/share to arrive at a TP of Rs 2,800/share, implying an upside potential of 12% from CMP.Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

Mindtree: Healthy Revenue Growth, Efficient Execution to Aid Margin Expansion

External broker reports(aggregated public sources), ICICI Securities Ltd

ICICI Securities Limited

<p>About the stock: Mindtree Ltd (Mindtree) is a mid-tier IT company with a presence in US, Europe &amp; RoW catering to BFSI, Communication Media &amp; Technology, Retail &amp; Travel</p><ul><li>Expertise in infrastructure &amp; application catering to Global 2000 clients</li><li>Leading margins (&gt;20%) compared to mid-tier IT companies</li></ul><p>Q1FY22 Results: Mindtree reported robust Q1FY22 results.</p><ul><li>US$ revenues increased 7.7% QoQ to US$310</li><li>EBITDA declined 166 bps QoQ to 20.3% led by headcount addition</li><li>Deal pipeline is up 34.2% QoQ to US$504 million</li></ul><div class="content-highlight"><em>Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.</em></div>

About the stock: Mindtree Ltd (Mindtree) is a mid-tier IT company with a presence in US, Europe &amp; RoW catering to BFSI, Communication Media &amp; Technology, Retail &amp; TravelExpertise in infrastructure &amp; application catering to Global 2000 clientsLeading margins (&gt;20%) compared to mid-tier IT companiesQ1FY22 Results: Mindtree reported robust Q1FY22 results.US$ revenues increased 7.7% QoQ to US$310EBITDA declined 166 bps QoQ to 20.3% led by headcount additionDeal pipeline is up 34.2% QoQ to US$504 millionContent is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

External broker reports(aggregated public sources), HDFC Securities

HDFC Securities

<p>Our target price is INR 2,635, valued at 28x Jun-23E EPS (15% CAGR over FY21-24E over a high base in FY21 at &gt;70%). Mindtree: We maintain ADD on Mindtree (MTCL), following revenue outperformance in Q1, all-time high bookings and hiring reflecting strong demand, and improving revenue profile (broad-based). Mindtrees growth mix has improved in recent times (vs. a skewed profile earlier), led by interventions to drive large/annuity deals. Its sustainable structural improvement is validated by (1) the uptick in Q1 deal TCV at &gt;USD 0.5bn (vs.</p>
<div class="content-highlight"><em>Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.</em></div>

Our target price is INR 2,635, valued at 28x Jun-23E EPS (15% CAGR over FY21-24E over a high base in FY21 at &gt;70%). Mindtree: We maintain ADD on Mindtree (MTCL), following revenue outperformance in Q1, all-time high bookings and hiring reflecting strong demand, and improving revenue profile (broad-based). Mindtrees growth mix has improved in recent times (vs. a skewed profile earlier), led by interventions to drive large/annuity deals. Its sustainable structural improvement is validated by (1) the uptick in Q1 deal TCV at &gt;USD 0.5bn (vs.
Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

External broker reports(aggregated public sources), Motilal Oswal Financial Services Limited

Motilal Oswal

<p>MTCL delivered another strong quarter, with USD CC revenue growth of 7.6% QoQ, above our estimate of 6.3%, led by broad based growth across client buckets. Deal TCV was at a record high of USD504m, with a growing proportion of annuity deals, which offers better revenue visibility, but having larger than usual renewal share. EBITDA margin fell 160bp QoQ, led by higher employee additions, increased subcontracting expenses (170bp), and greater visa costs (40bp), but partially offset by cross currency gains and higher revenue (50bp).</p><div class="content-highlight"><em>Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.</em></div>

MTCL delivered another strong quarter, with USD CC revenue growth of 7.6% QoQ, above our estimate of 6.3%, led by broad based growth across client buckets. Deal TCV was at a record high of USD504m, with a growing proportion of annuity deals, which offers better revenue visibility, but having larger than usual renewal share. EBITDA margin fell 160bp QoQ, led by higher employee additions, increased subcontracting expenses (170bp), and greater visa costs (40bp), but partially offset by cross currency gains and higher revenue (50bp).Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

Stellar revenue in 1QFY22, deal wins imply continuing momentum

India

Mindtree Limited is an international IT company. The Company delivers business and technology solutions through global software development. Mindtree develops applications to help companies enhance their enterprise operations. The Company also delivers product-development services and designs reusable building blocks for high-tech companies.

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Mindtree Ltd (MTCL IN)

India Channel Insight | IT Services, Real Estate

Our interactions suggest challenging times ahead for IT Services and multiple sectoral dynamics at play in residential real estate.

Pranav Bhavsar

Mindtree: Healthy Revenue Growth, Efficient Execution to Aid Margin Expansion

We recommend a BUY on the stock and assign 27x P/E multiple to its FY23E earnings of Rs 105.1/share to arrive at a TP of Rs 2,800/share, implying...

Axis Direct

Mindtree Limited: Robust Revenue Growth

Mindtree Ltd (Mindtree) is a mid-tier IT company with a presence in US, Europe & RoW catering to BFSI, Communication Media & Technology, Retail &...

ICICI Securities Limited

Mindtree: Results Review

Our target price is INR 2,635, valued at 28x Jun-23E EPS (15% CAGR over FY21-24E over a high base in FY21 at >70%). Mindtree: We maintain ADD on...

HDFC Securities

Stellar revenue in 1QFY22, deal wins imply continuing momentum

MTCL delivered another strong quarter, with USD CC revenue growth of 7.6% QoQ, above our estimate of 6.3%, led by broad based growth across client...

Motilal Oswal

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