Sell or Hold: LTIMindtree Falls 6% After Announcing Disappointing Q3 Results

Synopsis: LTI mindtree saw its shares hit an intraday low of Rs 5986. The company’s result states a revenue growth of 11 percent but the profits fell by 12 percent. Citi has given a sell rating with a  target 16 percent lower than the CMP.

The global technology consulting and digital solutions company LTI mindtree Ltd announced the company result for Q3FY26, with revenue growth of 11 percent YoY and almost 4 percent QoQ, But the company saw its profits fall by 12 percent YoY,  leading to investor distress.

With a market cap of Rs 1,78,042 Cr, LTIMindtree Ltd saw its stock hit an intraday low of Rs 5986 which is 6.5 percent lower than the previous close of Rs 6405. The company’s stock has given a compounded return of 15 percent in the last 3 years, and a 10 percent CAGR since the start of FY26.

The Q3FY26 Result

In the latest quarterly result LTIMindtree Ltd has seen its revenue from operations increase by 11 percent YoY, from Rs 9,660 Cr in Q3FY25 to Rs 10,781 Cr in Q3FY26, while the QoQ went up by 3.7 percent from Rs 10394 Cr in Q2FY26. 

The net profits fell by 12 percent YoY from Rs 1,086 Cr in Q3FY25 to Rs 959 Cr in Q3FY26  while the QoQ fell by 30 percent from Rs 1,381 Cr in Q2FY26. In 9M numbers of the fiscal year, the company saw its revenue from operations increase by almost 10 percent YoY, from Rs 28,236 Cr in 9MFY25 to Rs 31,015 Cr in 9MFY26. The net profits for the same period grew by 3.5 percent going from Rs 3,473 Cr to Rs 3,595 Cr.

Highlights 

As of Q3FY26, the company generates 35 percent of its revenue from BFSI industry, 22 percent from technology, media and communication, 21 percent from manufacturing, 15 percent from consumer business and about 7 percent from Healthcare, Life Sciences and Public Services.

While the company noticed its revenue from north america drop from 74 percent to 73 percent, the company witnessed its revenue from Europe rise from  14.7 percent to 14.8 percent and the rest of the world increase from 11.1 percent to 12.4 percent. The company has also expanded its operating margin by 20bps from the last quarter to currently stand at 16.1 percent.

Brokerage View

Citi reiterated its Sell rating with a target price of Rs 5,415, noting that revenue was supported by seasonal pass-throughs while margins benefited from lower SG&A expenses. However, the brokerage cautioned that upcoming wage hikes could pressure margins by nearly 100 basis points across Q4 and Q1, posing a near-term risk.

Nuvama maintained a Neutral rating with a target price of Rs 5,900, which is an additional 8 percent fall from the previous close, the broker highlights that the company’s Q3 performance ranged from in-line to a modest miss. EBIT margin stood at 16.1 percent, below expectations, impacted by a one-time labour law provision of Rs 590 crore, which acted as a key drag on profitability.

LTIMindtree Ltd is a global technology consulting and digital solutions company providing services in digital transformation, cloud computing, data analytics, enterprise applications, and IT services across industries such as BFSI, retail, manufacturing, and telecom. It was incorporated in 1996 and is headquartered in Mumbai, India.

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