IT services company LTIMindtree has set its sights on achieving $10 billion in revenue by financial year 2031-32 by scaling verticals and embracing artificial intelligence (AI), as unveiled during its Investor Day on November 26. However, the announcement met with mixed reactions from brokerage firms, with many expressing caution over margin pressures and execution risks.
In fiscal 2024, the company’s revenue rose 4.4% year-on-year to $4.29 billion. Shares of LTIMindtree rose marginally to Rs 6,236.15 on the National Stock Exchange following the announcement.
At the event, the company detailed plans to strengthen its core verticals—banking, financial services, and insurance (BFSI), and technology—while accelerating growth in manufacturing, healthcare, and life sciences.
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The company plans to grow its BFSI and technology verticals by two times and triple revenues in manufacturing, healthcare, and consumer business. It also emphasised leveraging partnerships with hyperscalers and core platforms to drive its growth agenda.
Chief executive officer (CEO) Debashis Chatterjee outlined three strategic pillars: scaling verticals and mining Fortune 500 accounts, leveraging AI to enhance core services, and doubling or tripling revenues in key verticals to drive growth.
To improve margins, chief financial officer (CFO) Sudhir Chaturvedi highlighted initiatives like “Project North Star”, aimed at reducing resource costs and enhancing productivity through AI. The company is targeting EBIT (earnings before interest and taxes) margins of 17-18% within the next two-three years, contingent on achieving a double-digit revenue growth trajectory.
Brokerages divided
Despite the bold target, brokerages retained varied outlooks on LTIMindtree’s stock. Nomura maintained a “reduce” rating with a target price of Rs 5,140, citing concerns over discretionary spending and reliance on double-digit revenue growth to sustain EBIT margins. “The company’s ambitious goal comes with challenges, particularly around unrealized post-merger synergies and potential hiring needs,” the firm said.
Conversely, Morgan Stanley issued an “overweight” rating with a target price of Rs 7,050, expressing optimism about the company’s strong deal pipeline and sales momentum.
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