Shares of LTIMindtree, which will enter Nifty on July 13, will turn ex-dividend on Monday. The IT firm had announced a final dividend of Rs 40 per share. Today is also the record date for the purpose of determining name of the eligible shareholders for dividend. All eligible shareholders with their names in the list at the end of record date will be eligible to receive dividend. The actual payment will be made on August 16.
LTIMindtree, which is a new entrant in tier I, is seen posting 0.8 per cent constant currency CC revenue growth in the June quarter, benefiting from merged synergies in digital services and cost take-out deals in BFSI. EBIT margin is expected to stay range-bound, likely up 30 bps QoQ.
All eyes will be on vendor consolidation deal win rate; margin efficiency in high wage hike scenario and demand outlook in Hi-Tech vertical, Elara Securities said in a note. On YoY basis, Elara sees profit at Rs 1,305 crore, up 8.2 per cent. It sees dollar revenue at $106.80 million, up 9 per cent. Ebit margin is seen at 16.7 per cent, down 70 per cent YoY (up 30 per cent QoQ).
Kotak Securities said Mindtree's portfolio of business has high exposure to impacted verticals of retail and hi-tech, which could be under pressure in the June quarter. Revenue growth on YoY basis could be reasonably healthy at 12.5 epr cent, it said.
"We expect 230 bps sequential margin improvement due to absence of one-time merger costs and furloughs. Note that margin will still decline by 180 bps on YoY basis, attributable to investments in people for future growth. Our margin forecast does not factor in any additional one-off merger-related charges. We do not expect departure of Venu Lambu, ex-co-head of sales, at the beginning of the quarter to impact the deal win momentum," it said.
Kotak sees healthy total contract value TCV signings on YoY basis, aided by large deal wins. "Both LTI and Mindtree on standalone basis have capability to win large deals in managed services. The combined entity has won quite a few deals involving integrated service offerings, which were showcased during March 2023 analyst day meet. We expect investors to focus on timeline for early benefits from revenue synergies to flow into revenue, health of deal pipeline and conversion rates, timing of ramp-up of recently won large deals and their impact on margins, more details of new organisation structure including vertical-geo heads and outlook for Mindtree's portfolio given slowing cloud consumption," it said.
Meanwhile, LTIMindtree is likely to see $125-130 million in net inflows on Nifty inclusion, Nuvama Institutional Equities said last week. As per Nuvama estimates, LTIMindtree will see passive inflow of appx $172 million due to Nifty entry. That said, LTIMindtree will also see about $50 million in outflows due to adjustment in Nifty Next 50. The net inflow should be somewhere around $125 million to $130 million, said Abhilash Pagaria of Nuvama Institutional Equities.
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