Mindtree stock hits fresh 52-week high, rallies 16% in 10 days

The stock has outpaced the market by surging 16 per cent in the last 10 trading days, as compared to a 2 per cent decline in the S&P BSE Sensex

Shares of Mindtree continued their northward march and jumped 5 per cent on Tuesday to hit a 52-week high of Rs 1,062 on the BSE in an otherwise range-bound market.

The stock of the IT consulting & software firm outpaced the market by surging 16 per cent in the past 10 trading days, as compared to 2 per cent decline in the S&P BSE Sensex. It hit an all-time high of Rs 1,182 on September 11, 2018.

On Wednesday, February 19, 2020, Times of India had reported that Mindtree has won a $150-$200 million (Rs 1,100 crore – Rs 1,440 crore), multi-year deal from Dutch conglomerate Philips for clutch of solutions around hi-tech and digital. Mindtree, which counts Microsoft as its largest customer, won the deal against stiff competition from largest players, the report said.

In an exchange filing, Mindtree issued a clarification on the report, saying, “we would like to bring to your kind notice that the information in the news item is speculative in nature at this point of time”.

Meanwhile, on January 22, rating agency India Ratings and Research (Ind-Ra) had upgraded MindTree’s long-term issuer rating to 'IND AA+' from 'IND AA', while resolving the Rating Watch Evolving (RWE) with positive outlook.

“MindTree’s revenue growth rate from digital technology, which encompass cloud computing, artificial intelligence, machine learning and productised end-to-end solutions, is likely to pick up momentum in the next two-to-three years and will grow at a much faster pace than revenue from traditional offerings,” Ind-Ra said in press release.

The contribution of digital technology to MindTree’s total revenue increased to 49 per cent in FY19 from 43.5 per cent in FY18; it stands at much higher proportion than the industry average of around 30 per cent. This supports MindTree’s strong market position in the sector, it said.

The agency expects the momentum of revenue growth to continue in the next few quarters for Mindtree and believes the company will be able to generate revenue growth of 10 per cent-12 per cent year on year in FY20. Ind-Ra also expects the margins to recover from 3QFY20 levels, owing to the management’s consistent cost efficiency efforts.

At 11:37 am, Mindtree was trading 3 per cent per cent higher at Rs 1,049 on the BSE, against 0.14 per cent rise in the S&P BSE Sensex. A combined 1.45 million equity shares have changed hands on the counter on the NSE and BSE so far.