Earnings season has a way of throwing curveballs, but when a frontline information technology stock slides sharply right after announcing its results, it forces investors to pause and take a closer look. That is exactly what played out with LTIMindtree. A day after declaring its Q3FY26, the stock came under heavy selling pressure and plunged over 7% in intraday trade. Was the market disappointed with the results, or is this a case of expectations running ahead of fundamentals?

Brokerage reports are always in focus during the ongoing earnings season. Following the quarterly results, several leading brokerage houses have come out with their analysis of this information technology sector stock. Let’s take a look at what the brokerages are saying and the rationale behind their views.

Motilal Oswal on LTI Mindtree

The domestic brokerage house Motilal Oswal has retained a ‘Buy’ rating on LTIMindtree. It has set a target price of Rs 7,900, implying an upside potential of 23% from current levels.

As per the brokerage report, the company reported USD 1.2 billion in revenue for Q3FY26. This is up 2.4% quarter-on-quarter in constant currency and is slightly above the estimated 2.2%. Earnings before interest and tax (EBIT) stood at 16.1%, while adjusted profit after tax (PAT) came in at Rs 1,400 crore.

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The brokerage report added, “Momentum built over the past two quarters should carry into Q4, supported by ongoing deal ramp-ups and stabilisation in large accounts.”

Revenue growth for the fourth quarter is expected at 2.5% quarter-on-quarter, while medium-term earnings growth potential is projected at 13-15%.

Motilal Oswal also highlighted steady order inflows, with USD 1.7 billion booked in Q3, indicating demand remains strong despite a cautious macroeconomic backdrop.

Margins are expected to remain stable. As per the brokerage report, “Margins remain supported by Fit4Future execution and SG&A discipline, even as near-term wage headwinds persist.” EBIT margins are projected to settle around 15.5%-16.1% in FY26 and FY27.

Nuvama on LTIMindtree

Another brokerage, Nuvama, also maintained a Buy rating on LTIMindtree with a target price of Rs 7,750. This implies about 21% upside.

As per the brokerage report, Q3 continued the growth momentum from the previous two quarters, with EBIT margins expanding 20 basis points quarter-on-quarter to 16.1%.

The brokerage report highlighted that “LTIMindtree finally appears to be moving towards realising its true potential under the leadership of Venu Lambu.”

Growth is expected to continue in Q4, driven by new deal wins and artificial intelligence-led offerings. Productivity improvements from the Fit-for-Future program added roughly 230 basis points in the first nine months. Meanwhile, the company’s workforce has risen to 87,900 employees, including about 1,700 freshers, with 70% having AI skills.

Nomura on LTI Mindtree

Nomura has a ‘Neutral’ rating with a target price of Rs 5,900. This suggests a downside of nearly 8% from current levels. According to the brokerage report, FY26 is expected to be a year of repair, as LTIMindtree navigates the transition under its new CEO.

Nomura expects dollar revenue growth of 6.5% for FY26, compared with 4.8% in FY25. EBIT margins are projected to rise to 15.5% and further to 16.2-16.3% in FY27-28.

Wage hikes planned in Q4FY26 and Q1FY27 are expected to affect margins by around 100 basis points each. The brokerage also noted that the company’s pipeline remains strong, with large deals already ramping up, providing a foundation for recovery.

Conclusion

While Motilal Oswal and Nuvama see the stock’s medium-term prospects positively, Nomura emphasises valuation caution and near-term limitations. Overall, the tech sector stocks are on a cautious footing in trade today. The Nifty IT Index is down nearly 2%.

Disclaimer: This article provides factual analysis only and is not, and should not be construed as, an offer, solicitation, or recommendation to buy or sell securities. Investors must conduct their own independent due diligence and seek advice from a SEBI-registered financial advisor.