Mindtree – The crisis is gone, but growth is yet to come back

The stock might have some downside, given the overall volatile macro and market environment. Such weakness could present a buying opportunity

Mindtree’s September quarter (Q2) performance came in better than that of the June quarter (Q1) as efforts of the new management paid off in terms of stability for clients and employees. However, strong revenue performance and margin improvement may have to wait.

We expect single-digit earnings growth in the next couple of years. In this context, the valuation at 14x FY21e earnings leaves room for downside. Hence, investors should accumulate on correction.

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