Margin pressures, valuations could restrict Mindtree's upside

The Street, however, is bullish on revenue growth prospects this year for Mindtree as well as for the midcap IT space

Strong revenue growth and margin outlook post its stellar June quarter results saw Mindtree stock gain about 8 per cent in trade on Wednesday. The management guided for a double digit sales growth and margins at 20 per cent for FY22. Strong growth expectations rubbed off on the broader mid cap IT sector with L&T Infotech, Mphasis, L&T Technology and Coforge gaining between 4-6 per cent.

The basis for the company’s positive growth commentary was the record order book at $540 million as compared to the average quarterly run rate of $375 million. In addition to a healthy deal pipeline,