Mindtree rebounds 2% on JPMorgan upgrade

Mindtree rebounds 2% on JPMorgan upgrade

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Mindtree stock gained nearly 2 percent intraday Tuesday after seeing correction for previous three consecutive sessions, as JPMorgan upgraded the stock to overweight on attractive valuations.

In previous three straight sessions, the stock plunged 18.3 percent as brokerages itself had slashed target price after weak set of earnings reported by the company and cautious macro commentary which is in contrast to current sector mood.

After recent sharp fall, JPMorgan said the current price appears attractive entry for 30 percent potential upside over 9-12 months. It expects the stock to go up to Rs 1,050 with just one strong quarter.

“Some wrinkles will iron out but they are likely factored in. Top client continued to drive company’s performance and rest of the business too is growing comfortably at double-digit YoY,” it reasoned.

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However, the risks to upgrade emanated from being unable to drive growth ex-top client, JPMorgan said.

Mindtree has executable total contract value over 12 months at $457 million in first half of FY19, up 26 percent YoY.

The midcap IT company said its Q3FY19 revenue growth rate will be similar to Q2FY19 growth rates based on visibility in the deal pipeline and expects Q3FY19 margins to be slightly better than Q2FY19.

Mindtree has reported a 30.4 percent sequential growth in second quarter profit to Rs 206.3 crore and 7.1 percent in revenue at Rs 1,755.4 crore. Constant currency revenue growth stood at 2.4 percent QoQ.

At 11:50 hours IST, the stock was quoting at Rs 810.20, up Rs 5.25, or 0.65 percent on the BSE.

courtsey By – https://www.moneycontrol.com/news/buzzing-stocks/mindtree-rebounds-2jpmorgan-upgrade_11576241.html

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