Further upsides in Mindtree may be capped, headwinds foreseen

Supply side pressures could hit its efforts to maintain margins above 20 per cent

Mid-cap information technology major Mindtree was the biggest gainer in the IT space over the last month, fetching investors 35 per cent returns. This was over four times the returns of the Nifty IT index over this period. Revenue visibility on the back of record deal pipeline, recovery in travel, transportation and hospitality vertical, strong margin guidance despite cost pressures and a IT midcap rally have acted as tailwinds for the stock.

After the highest organic growth among peers of 7.7 per cent on a sequential basis in Q1, the company is expected to maintain double-digit growth for the full