Macquarie cuts target price on LTIMindtree as merger synergies hit rough patch

Macquarie cut its target price on LTIMindtree to Rs 6,250 from Rs 7,050 per share as the merger synergies hit a rough patch.

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International brokerage Macquarie has slashed its target price on IT services player LTIMindtree as the “merger synergies hit a rough patch”.

Macquarie cut its target price to Rs 6,250 from Rs 7,050 per share. From the closing price on April 16, this indicates an upside of over 34 percent. However, Macquarie maintained ‘outperform’ as LTIMindtree remains structurally sound.

This target cut comes after Pankaj Chugh and Gregory Dietrich resigned as executive vice-presidents of global sales with immediate effect.

The international brokerage said that LTIMindtree’s top clients have performed well, however, beyond that, the client mining has faltered.

Cross-selling synergies will only recover after demand sees a substantial pick-up and recovery.

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Brokerage firm JPMorgan turned bullish on select information technology stocks on April 4. Both LTIMindtree and KPIT Tech received an upgrade to ‘neutral’ from the previous ‘underweight’ call with a target price of Rs 5,200 and Rs 1,400.

As for the demand environment, JPMorgan believes that it has remained stagnant since reaching a bottom in the second half of CY23, with no noticeable improvement expected in either Q4FY24 or Q1FY25.

On March 11, Jefferies cut its target price on the IT services player. The brokerage cut LTIMindtree’s target price to Rs 5,890 per share.

Jefferies said the resignation of LTIMindtree’s CFO Vinit Teredesai, along with other senior-level exits, suggest that the IT company might be facing integration issues from the merger.

Over the past six months, LTIMindtree shares have fallen 9.4 percent.  In comparison, the key Nifty 50 index has risen around 13 percent during the same time period.

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