LTIMindtree shares slumped 7 on Tuesday as investors reacted to the company’s third-quarter results, which came in largely in line with expectations but flagged near-term margin pressures.
The stock ended 7 per cent lower on the NSE at 5,976.50, hitting a low of 5,911.50. The stock opened at ₹6,245.50. In the previous trading session, it scaled to a 52-week high of ₹6,429.50.
The stock’s fall followed cautious commentary around profitability, cost headwinds and limited scope for re-rating on the stock, even as management maintained its outlook for close to double-digit revenue growth by the fourth quarter of FY26, supported by the ramp-up of recent large deal wins.
The company posted a 10.5 per cent decline in consolidated net profit to ₹970.6 crore in the December 2025 quarter, primarily due to the one-time provision from the implementation of the new labour codes. However, its revenue from operations rose 11.6 per cent to ₹10,781 crore in Q3 FY26 from ₹9,661 crore in Q3 FY25.
Despite the sharp drop in the share price, most brokerages remain constructive on LTIMindtree’s medium-term prospects, pointing to strong deal momentum, improving visibility in key accounts and the company’s ongoing push into AI-led transformation as key drivers for growth in FY27 and beyond.
Global brokerage CLSA said LTIMindtree delivered another in-line quarter and retained its outperform rating with a target price of ₹7,067. According to the brokerage, the ramp-up of these deals has helped offset the AI-led productivity impact in key accounts and verticals. It also expects the company’s major BFSI accounts to bottom out in the fourth quarter, setting the stage for high single-digit revenue growth in FY27, though it sees limited scope for further re-rating and expects earnings growth to drive upside.
Morgan Stanley maintained its equal-weight rating on the stock with a target price of ₹6,300. The brokerage said commentary around growth in the top hi-tech client in the third quarter and signs of recovery in the top BFSI client by the fourth quarter were encouraging. It also noted that LTIMindtree appears to be ahead of peers in portfolio transition.
However, Morgan Stanley cautioned that near-term margins could remain under pressure, resulting in a balanced risk-reward at current levels, even as management continues to expect to exit FY26 with close to double-digit growth.
Nomura took a more cautious view, retaining its neutral rating with a target price of ₹5,900. It said the quarter was in line with a modest miss across key parameters, with EBIT margin at 16.1 per cent, slightly below its expectations. Nomura also flagged that deal wins worth $1.69 billion showed only marginal year-on-year growth, and pointed to a one-time charge of ₹5.9 billion related to provisions for a new labour law.
Domestic brokerage Elara Capital reiterated its accumulate rating while raising its target price to ₹6,740. It said LTIMindtree continues to gain wallet share at its largest customers by consolidating tail vendors and has ruled out the risk of being replaced by another large vendor at any of its key accounts.
Elara expects performance revival in the top five to ten accounts to be the main growth driver in FY27. It has also raised its earnings estimates for FY27 and FY28, citing continued growth momentum and potential margin expansion.
Motilal Oswal maintained its buy rating at ₹7,900, emphasising that sustained revenue momentum and steady order inflows underpin its confidence in 5.6 per cent year-on-year constant currency growth for FY26. It added that AI-led services spending is likely to provide an additional boost from mid-2026. While near-term wage headwinds persist, Motilal Oswal believes margins remain supported by disciplined execution of the Fit4Future programme and SG&A controls, and sees medium-term earnings growth potential of 13–15 per cent.
According to Nuvama Institutional Equities, the company delivered a strong all-round performance in Q3, continuing its growth momentum of the last two quarters. It has maintained buy at an increased target price of ₹7,750 from ₹6,900 earlier.
HDFC Securities also retained its buy rating with a target price of ₹7,470. It said LTIMindtree continues to position itself as an AI-ready organisation, with over half of its workforce already upskilled in AI and the company embedding AI across both its offerings and internal operations. The brokerage acknowledged that planned wage hikes for half of the employees in the fourth quarter and seasonal headwinds may impact margins, but said LTIMindtree remains focused on operational efficiency and has maintained its broader estimates.
Meanwhile, Choice Institutional Equities has downgraded the stock to reduce at a target price of ₹6,150.