External broker reports(aggregated public sources), HDFC Securities

HDFC Securities

External broker reports(aggregated public sources)

Equity Bottom-Up

<p>Mindtree: Mindtree (MTCL) delivered an exceptional quarter with double-digit QoQ growth and beat on margins despite wage hikes and supply side issues. The dependence on the top account is coming down and growth was broad-based across verticals/geographies/service lines. Mindtree's growth momentum will continue, supported by non-T1 accounts (+17.6% QoQ), customer success (+21.8% QoQ) and investments in Europe (manufacturing). Its sustainable structural improvement is validated by (1) the uptick in Q2 deal TCV at &gt;USD 300mn and lower dependence on non-T1 account, (2) improved cross-sell and addition of strategic logos (seven in Q2), and (3) healthy growth in the travel vertical, supported by core modernisation.</p>
<div class="content-highlight"><em>Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.</em></div>

Mindtree: Mindtree (MTCL) delivered an exceptional quarter with double-digit QoQ growth and beat on margins despite wage hikes and supply side issues. The dependence on the top account is coming down and growth was broad-based across verticals/geographies/service lines. Mindtree's growth momentum will continue, supported by non-T1 accounts (+17.6% QoQ), customer success (+21.8% QoQ) and investments in Europe (manufacturing). Its sustainable structural improvement is validated by (1) the uptick in Q2 deal TCV at &gt;USD 300mn and lower dependence on non-T1 account, (2) improved cross-sell and addition of strategic logos (seven in Q2), and (3) healthy growth in the travel vertical, supported by core modernisation.
Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

HSIE Results Daily: Infosys, Wipro, Mindtree

Pan-Asia Index Rebalances/ Events/ Delta One, Periscope Analytics

Brian Freitas

Pan-Asia Index Rebalances/ Events/ Delta One

Event-Driven

<p>The Indian mutual fund industry has assets of almost INR 7.93 trillion (US$106.3bn) across Multi cap, Large Cap, Large and Mid Cap, Mid Cap, Small Cap and Flexi Cap equity schemes. Equity schemes classified as large cap need to have at least 80% of their assets invested in large cap stocks, large and mid cap schemes need to have at least 35% of their assets in large cap stocks and at least 35% in mid cap stocks, mid cap funds need to hold at least 65% of their assets in mid cap stocks, and small cap funds need to hold at least 65% of their assets in small cap stocks. Flexi cap funds can invest across market caps.</p><p>The Association of Mutual Funds in India (AMFI) publishes the list of the stocks in each market cap segment in January and July each year and mutual funds have one month to rebalance their portfolios to adhere to the new categorization.</p><p>We are just past halfway through the review period for the second half of 2021. Using data to the close on 4 October, at the next recategorization in January 2022, we see 10 stocks moving from the mid cap segment to the large cap segment, 11 stocks moving from the large cap segment to the mid cap segment , 11 stocks are expected to move from the small cap segment to the mid cap segment, with16 stocks moving from the mid cap to the small cap segment. <a href="https://www.smartkarma.com/entities/zomato-media-pvt" target="_blank" data-smartkarma-citation="entities:28820:1" rel="noopener">Zomato (ZOMATO IN)</a> will be a part of the large cap universe, while 4 other newly listed stocks will be a part of the mid cap universe.</p><p>Historically, stocks moving to a higher market cap category have outperformed stocks that migrate to a lower market cap category over the back half of the review period. In some cases, the outperformance continues past the announcement of the changes as well. This can be attributed to fund managers realigning their portfolios to meet the new categorization. This provides opportunities to pre-position for the move and unwind post the announcement of the reclassification.</p>

The Indian mutual fund industry has assets of almost INR 7.93 trillion (US$106.3bn) across Multi cap, Large Cap, Large and Mid Cap, Mid Cap, Small Cap and Flexi Cap equity schemes. Equity schemes classified as large cap need to have at least 80% of their assets invested in large cap stocks, large and mid cap schemes need to have at least 35% of their assets in large cap stocks and at least 35% in mid cap stocks, mid cap funds need to hold at least 65% of their assets in mid cap stocks, and small cap funds need to hold at least 65% of their assets in small cap stocks. Flexi cap funds can invest across market caps.The Association of Mutual Funds in India (AMFI) publishes the list of the stocks in each market cap segment in January and July each year and mutual funds have one month to rebalance their portfolios to adhere to the new categorization.We are just past halfway through the review period for the second half of 2021. Using data to the close on 4 October, at the next recategorization in January 2022, we see 10 stocks moving from the mid cap segment to the large cap segment, 11 stocks moving from the large cap segment to the mid cap segment , 11 stocks are expected to move from the small cap segment to the mid cap segment, with16 stocks moving from the mid cap to the small cap segment. Zomato (ZOMATO IN) will be a part of the large cap universe, while 4 other newly listed stocks will be a part of the mid cap universe.Historically, stocks moving to a higher market cap category have outperformed stocks that migrate to a lower market cap category over the back half of the review period. In some cases, the outperformance continues past the announcement of the changes as well. This can be attributed to fund managers realigning their portfolios to meet the new categorization. This provides opportunities to pre-position for the move and unwind post the announcement of the reclassification.

India: Stock Reclassification & Active Portfolio Management (Dec 2021)

External broker reports(aggregated public sources), Axis Direct

Axis Direct

<p>We recommend a BUY rating on the stock and assign a 36x P/E multiple to its FY24E earnings of Rs 128.3/share to arrive at a TP of Rs 4600/share, implying an upside of 12% from CMP.</p><div class="content-highlight"><em>Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.</em></div>

We recommend a BUY rating on the stock and assign a 36x P/E multiple to its FY24E earnings of Rs 128.3/share to arrive at a TP of Rs 4600/share, implying an upside of 12% from CMP.Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

Mindtree: Another Robust Year; Strong Outlook

Consumer Analyst / Channel Surveillance Specialist, Trudence Capital Advisors

Pranav Bhavsar

Consumer Analyst / Channel Surveillance Specialist

Trudence Capital Advisors

Trudence Capital Advisors Private Limited is a SEBI-registered Research Analyst, holding SEBI registration number INH000015747. Our firm is dedicated to providing independent and unbiased research on Indian mid to large-cap companies. Trudence Capital is known for its counter-consensus views, with a focus on forensic research and on-ground primary investigations. Our research approach is thorough, involving detailed analysis of accounting practices and governance, alongside extensive channel checks.

Independent & Unbiased Research

Thematic (Sector/Industry)

<p>For this channel insight, we speak to industry veterans in IT Services and Real Estate with an objective to understand the changing dynamics in the Industry. Our interactions suggest challenging times ahead for IT Services and multiple sectoral dynamics at play in residential real estate.</p>
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<h3>About India Channel Insight </h3>
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<p>Our objective with India Channel Insight is to share snippets from our channel interactions that are part of our research process. These snippets emerging out of these interactions and have been aiding us to generate interesting trade ideas and have often proven to be reliable sources of qualitative alpha.</p>
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For this channel insight, we speak to industry veterans in IT Services and Real Estate with an objective to understand the changing dynamics in the Industry. Our interactions suggest challenging times ahead for IT Services and multiple sectoral dynamics at play in residential real estate.


About India Channel Insight 



Our objective with India Channel Insight is to share snippets from our channel interactions that are part of our research process. These snippets emerging out of these interactions and have been aiding us to generate interesting trade ideas and have often proven to be reliable sources of qualitative alpha.


India Channel Insight | IT Services, Real Estate

<p>We recommend a BUY on the stock and assign 27x P/E multiple to its FY23E earnings of Rs 105.1/share to arrive at a TP of Rs 2,800/share, implying an upside potential of 12% from CMP.</p><div class="content-highlight"><em>Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.</em></div>

We recommend a BUY on the stock and assign 27x P/E multiple to its FY23E earnings of Rs 105.1/share to arrive at a TP of Rs 2,800/share, implying an upside potential of 12% from CMP.Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

Mindtree: Healthy Revenue Growth, Efficient Execution to Aid Margin Expansion

India

Mindtree Limited is an international IT company. The Company delivers business and technology solutions through global software development. Mindtree develops applications to help companies enhance their enterprise operations. The Company also delivers product-development services and designs reusable building blocks for high-tech companies.

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Mindtree Ltd (MTCL IN)

HSIE Results Daily: Infosys, Wipro, Mindtree

Mindtree: Mindtree (MTCL) delivered an exceptional quarter with double-digit QoQ growth and beat on margins despite wage hikes and supply side...

HDFC Securities

India: Stock Reclassification & Active Portfolio Management (Dec 2021)

Halfway through the review period, we take a look at stocks that could migrate across the large, mid and small cap segments. With over US$100bn of...

Brian Freitas

Mindtree: Another Robust Year; Strong Outlook

We recommend a BUY rating on the stock and assign a 36x P/E multiple to its FY24E earnings of Rs 128.3/share to arrive at a TP of Rs 4600/share,...

Axis Direct

India Channel Insight | IT Services, Real Estate

Our interactions suggest challenging times ahead for IT Services and multiple sectoral dynamics at play in residential real estate.

Pranav Bhavsar

Mindtree: Healthy Revenue Growth, Efficient Execution to Aid Margin Expansion

We recommend a BUY on the stock and assign 27x P/E multiple to its FY23E earnings of Rs 105.1/share to arrive at a TP of Rs 2,800/share, implying...

Axis Direct

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