Sell Mindtree Consulting, target Rs 338: IL&FS

IL&FS Investsmart has come out with research report on MindTree Consulting. It has recommended sell rating on the stock with a target price of Rs 338 in a report dated on November 13, 2007.

"We initiate coverage on MindTree Consulting (MindTree) with a ‘SELL' rating and a price target of Rs 338 (21% downside). MindTree is expected to post a two-year (FY07-09E) revenue and EPS CAGR of 27% and 17.5% respectively. At the current FY08E and FY09E PER of 15.2x and 13.0x, however, it is quoting at a premium of 56.0% and 59.8% to its peers, respectively. In our opinion, only a 5% premium, driven by the company’s strong management, is warranted. Consequently, our target price of Rs 338 is based on this 5% premium to the average PER of its midcap peers. At this price, the stock would be quoting at FY08E and FY09E PER of 12.0x and 10.3x respectively", According to IL&FS Investsmart.