Disclaimer: MindTree Analysis and recommendation is purely for knowledge purpose and not to consider as any financial advice. Data are collected from various sources and analysed.For testing accuracy paper trading can be done
CMP as on 20.04.2017- 438
Indian IT's core competencies and strengths have attracted significant investments from major countries. The computer software and hardware sector in India attracted cumulative Foreign Direct Investment (FDI) inflows worth US$ 22.83 billion between April 2000 and December 2016, according to data released by the Department of Industrial Policy and Promotion (DIPP).
The recent H1B visa issues and union budget allocations has impacted on the industry.
Company Information
ISIN: INE018I01017
52w High/Low: 755/399
Market Cap: 7486 crore
Regd Office: Bengaluru
MD and CEO: Mr. Rostow Ravanan
Sector: IT
About the Company
Mindtree delivers digital transformation and technology services from ideation to execution, enabling Global 2000 clients to outperform the competition. “Born digital,” Mindtree takes an agile, collaborative approach to creating customized solutions across the digital value chain.
Collaborative Spirit, Unrelenting dedication and expert thinking are the core values of the company.
The Company globally deals with more than 200 clients and offices in 14 countries including United States of America, United Kingdom, Japan, Singapore, Malaysia, Australia, Germany, Switzerland, Sweden, UAE, Netherlands, Canada, Belgium, France, Ireland, and Republic of China.. It specializes in ecommerce, mobility, cloud enablement,
digital transformation, business intelligence, data analytics, testing, infrastructure, EAI and ERP solutions. The
Company offers various services like: Application Development & Maintenance, Data Analytics, Digital Services, EAI BPM, Engineering R&D, Enterprise Application Services, Independent Testing, Infrastructure Management Services and IT strategy and consulting.
Source: Mindtree website
Performance Analysis:
From being a promising stock and high expectations mindtree's share has not performed that good over the past 6 months.In fact, when nifty gave +5.02% returns, mindtree gave -7.02% returns. Many events has concerned the performance of the stock and not kept fulfilling the expectations of investors.The fall from 520 levels are being consolidated at current levels and keeping eye on earnings mindtree is expecting a comeback.
Now let us see how it performed against the Nifty IT Index.
The company used to give better returns than the Nifty IT index. The recent decline started from the marked portion in graph as you can see. From August 2016 the geo political tensions, fall in margins,not upto expectation performance and many more factors gave a tag of "wealth destroyer" to Mindtree. The EPS is comparatively lower, but the P/e ratio indicates stock is undervalued.
So what is new for Mindtree?
Latest News:
The moving averages indicate that stock is getting better. Apart from that the pattern found shows a support near 430. Investors will be looking whether it breaks or not. The first resistance is seen at 450 levels. RSI is at 38.16 which indicates that the stock can move upward.The Mixed earnings and stock technicals shows some risk but still a better buy for long term.
House View
The stock is good and undervalued. Once, Current geo political tensions are over and better financials will give uptrend to the stock. Positive signals from around globe and better business opportunities will support the company. Strong fundamentals and operations are there for Mindtree. Since Indian IT industry is expanding and Mindtree has positioned itself as a growing company among competitors, the services and products offered by company has its own place in market. A weakness shown in technical analysis need to be wait and watch. The fundamentals of company is good. The recent reduction in net profit and other news are going to affect in coming weeks.
Expecting better results in future.
Apart from that for Long term buy or keep on adding approach, Mindtree is a good one. It is expected to touch 500 in medium term.
CMP as on 20.04.2017- 438
INDUSTRY
Information technology in India is an industry consisting of two major components: IT services and business process outsourcing (BPO).] The sector has increased its contribution to India's GDP from 1.2% in 1998 to 9.3% in 2015. The earnings of the IT Industry has been growing at good pace currently earning 143 billion in year 2015-2016. The rate of growth in domestic and export business of IT sector promises of earning 200 billion usd revenue by 2018.Indian IT's core competencies and strengths have attracted significant investments from major countries. The computer software and hardware sector in India attracted cumulative Foreign Direct Investment (FDI) inflows worth US$ 22.83 billion between April 2000 and December 2016, according to data released by the Department of Industrial Policy and Promotion (DIPP).
The recent H1B visa issues and union budget allocations has impacted on the industry.
Company Information
ISIN: INE018I01017 52w High/Low: 755/399
Market Cap: 7486 crore
Regd Office: Bengaluru
MD and CEO: Mr. Rostow Ravanan
Sector: IT
Shareholding Pattern:
About the Company
Mindtree delivers digital transformation and technology services from ideation to execution, enabling Global 2000 clients to outperform the competition. “Born digital,” Mindtree takes an agile, collaborative approach to creating customized solutions across the digital value chain.
Collaborative Spirit, Unrelenting dedication and expert thinking are the core values of the company.
The Company globally deals with more than 200 clients and offices in 14 countries including United States of America, United Kingdom, Japan, Singapore, Malaysia, Australia, Germany, Switzerland, Sweden, UAE, Netherlands, Canada, Belgium, France, Ireland, and Republic of China.. It specializes in ecommerce, mobility, cloud enablement,
digital transformation, business intelligence, data analytics, testing, infrastructure, EAI and ERP solutions. The
Company offers various services like: Application Development & Maintenance, Data Analytics, Digital Services, EAI BPM, Engineering R&D, Enterprise Application Services, Independent Testing, Infrastructure Management Services and IT strategy and consulting.
Source: Mindtree website
Performance Analysis:
From being a promising stock and high expectations mindtree's share has not performed that good over the past 6 months.In fact, when nifty gave +5.02% returns, mindtree gave -7.02% returns. Many events has concerned the performance of the stock and not kept fulfilling the expectations of investors.The fall from 520 levels are being consolidated at current levels and keeping eye on earnings mindtree is expecting a comeback.
Now let us see how it performed against the Nifty IT Index.
The company used to give better returns than the Nifty IT index. The recent decline started from the marked portion in graph as you can see. From August 2016 the geo political tensions, fall in margins,not upto expectation performance and many more factors gave a tag of "wealth destroyer" to Mindtree. The EPS is comparatively lower, but the P/e ratio indicates stock is undervalued.
So what is new for Mindtree?
Latest News:
- Mindtree Q4 results are out with a mixed approach in market. Even the net profit declined by 5.7% the revenue and key financials has shown improvement for the stock. Still ratios and ROCE employed points downwards.
- Revenue at $779.8 million (growth of 9.4%, constant currency growth of 11.2%) (yearly)
- Foreign exchange loss contributing to major erosion of net profit quarterly.. has reported increased earnings from US
- Constant Currency Revenue growth of 11.2% in FY 17; 9.4% in reported terms
- Strong contract closures of $926 Mn during the year FY 17
- In FY 17 - Digital grew by 18.3%; Technology, Media & Services grew by 16.5%; Retail, CPG & Manufacturing grew by 6.9%; BFSI grew by 5.1%; Travel & Hospitality grew by 4.6%
- Quarterly Annualized Attrition is at 13.2% which is the best since 2014
- Increased growth of revenue from US
Constant Increase in net Sales and PAT
The company is posting good sales and PAT. The PE ratio of Mindtree is 13.42 which is way below than IT industry P/E ratio which around 35. A stock with good fundamentals and debt free company is way undervalued. The current performance and the vision for 2020 is making mindtree more attractive.
The price at which it is currently trading is also good.
Technical Analysis
The moving averages indicate that stock is getting better. Apart from that the pattern found shows a support near 430. Investors will be looking whether it breaks or not. The first resistance is seen at 450 levels. RSI is at 38.16 which indicates that the stock can move upward.The Mixed earnings and stock technicals shows some risk but still a better buy for long term.
House View
The stock is good and undervalued. Once, Current geo political tensions are over and better financials will give uptrend to the stock. Positive signals from around globe and better business opportunities will support the company. Strong fundamentals and operations are there for Mindtree. Since Indian IT industry is expanding and Mindtree has positioned itself as a growing company among competitors, the services and products offered by company has its own place in market. A weakness shown in technical analysis need to be wait and watch. The fundamentals of company is good. The recent reduction in net profit and other news are going to affect in coming weeks.
Expecting better results in future.
Apart from that for Long term buy or keep on adding approach, Mindtree is a good one. It is expected to touch 500 in medium term.
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