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Investing.com - UBS initiated coverage on LTIMindtree Ltd (NSE:LTIM) with a Neutral rating and a price target of INR5,830.00 on Monday.
The investment bank cited LTIMindtree’s recent healthy deal wins and strong positioning for the upcoming generative AI cycle as positive factors supporting the company’s outlook.
UBS expressed concerns about LTIMindtree’s growth underperformance compared to mid-cap peers, its ability to achieve margin targets, and high client concentration risk.
The firm noted it is evaluating whether LTIMindtree should be considered a mid-cap or large-cap company, as it displays characteristics of both categories with a market capitalization approximately 16% above Tech Mahindra’s.
UBS highlighted that LTIMindtree’s valuation sits between large-cap IT services companies trading at 20-22x earnings and mid-caps trading at 30-40x, with LTIM currently at 28x, prompting the bank to wait for "stronger evidence on growth and margin recovery before turning positive."
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