Asymmetric risk-reward potential
LTIMindtree (LTIM) stands out as our top pick for CY25, backed by its significant exposure to BFSI and Hi-tech verticals—both projected to rebound strongly over the next 12-18 months. The company’s capabilities in data, ERP, and application modernization further underpin its ability to seize incremental demand in these segments. Additionally, LTIM’s AI-first pivot aligns with rising client reinvestments in next-generation transformation initiatives. Despite current uncertainties around management succession and near-term margin headwinds—as reflected in its relatively benign valuation of 27x FY27E EPS—we anticipate meaningful margin recovery by FY27 and leadership clarity by 1HCY25. These factors collectively present an asymmetric risk-reward scenario, reinforcing LTIM’s strong case as our top pick for CY25.
Valuation and view
We reiterate our BUY rating on LTIM due to its superior offerings in data engineering and ERP modernization, positioning it well to capture pre-GenAI expenditures. We anticipate LTIM to outperform its large-cap peers and expect low double-digit CC growth for FY26. LTIM could have managed its top-level churn rate more effectively post-acquisition. Nonetheless, we believe the toplevel attrition rate might remain benign going forward. Additionally, margins remain a concern and the biggest risk to our thesis.
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