LTM shares crashed 8% intraday on Wednesday, dropping to the day's low of ₹3,993 on the NSE, marking the biggest single-day fall in four years and snapping a four-day gaining streak. This represents the stock's biggest single-day fall since January 2024, with the decline emerging among the biggest losers in the IT space as brokerages presented split views on AI's impact on the company's growth prospects. The stock has fallen 0.40% in the last 5 days, 3.62% in the past month, and 9.2% over the last six months. The decline came amid broad-based selling in information technology stocks, with the Nifty 50 index down 0.6% during the same period.
Jefferies maintained its 'Underperform' rating on LTM after its Investor Day presentation, while retaining its price target at ₹3,500, indicating a downside of 17% from the current market price of ₹3,993. The brokerage house said that the company indicated that AI-led disruption could deflate core IT service revenues by 25%, but AI will expand the addressable market by $1.3 trillion, driven by Platformised IT and Business AI services. According to Jefferies, "LTM's plans to pivot to outcome-based offerings require a material change to pricing and talent strategy which may not be easy to execute. In this context, its aspirations to double revenues by 2031 with 200 basis points margin expansion seem very optimistic." The company believes new opportunities could emerge through what it calls Platformised IT Services, Business AI Services and AI-led Digital Engineering.
On the contrary, Motilal Oswal Financial Services has a target price of ₹5,400 on LTM, implying an upside of 25%, while retaining its 'Buy' rating. The brokerage believes that productivity pain for key accounts is behind, which could be positive as against peers in the next couple of years. According to Motilal Oswal, "We think this is a phase where acquisitions need to be more capability-led, especially around AI, rather than just geography or accounts. The next 12-18 months could see more M&A focused on building such capabilities." While growth acceleration remains measured at 7-8% over FY27-FY28 and the recovery in the top BFSI account is likely to be gradual, strong deal wins and a robust pipeline provide visibility. The brokerage believes LTIMindtree's estimated EPS CAGR of 14% for the next two years remains meaningfully better than that of large-caps.
The company's net profit came in at ₹1,387 crore in Q4FY26, up 44.6% sequentially, while revenue rose 4.7% sequentially to ₹11,291.7 crore. However, constant currency growth came in at 1.4%, even as margins remained under pressure. On the operating front, EBIT came in at ₹1,709.4 crore, but margins contracted to 15.1% from 16.1% in the previous quarter. The company's performance reflects the ongoing transition challenges as it pivots toward AI-focused services while managing traditional revenue streams.
The announcement that caught the most attention was the launch of 'Blueverse currency', a commercial model that seeks to move IT services pricing away from traditional effort-based contracts toward outcome-linked engagements. Analysts describe it as 'the key mechanism for non-linearity', saying it could help LTM capture value from AI-led productivity improvements and create recurring revenue streams through platformisation and subscriptions. Choice Equities believes LTM's focus on verticalised SLMs and agentic AI positions it well for the next phase of enterprise AI adoption, particularly in BFSI where domain expertise and proprietary data create competitive advantages. However, analysts cautioned that enterprise adoption could be gradual, given the conservative nature of procurement processes and the trust required to transition from conventional time-and-material contracts.
The Nifty index has breached key support levels with the index falling below its previous swing low of 23,262 during intraday trade and touching a low of 23,229. As reported by ET Now, the Nifty is currently trading below its 10-day, 20-day, 50-day, 100-day and 200-day moving averages, indicating sustained weakness across all time frames. According to Rajani, 23,150 remains the key support level while 23,800 is the critical hurdle that bulls must overcome to regain market control. Despite the broader positive sentiment around the AI strategy, analysts at PL Capital cautioned that near-term growth could remain challenging, citing leakage in the traditional bucket, weakness in marquee accounts, and maturing AI-led services.
