NEW DELHI: Shares of mid-tier IT firm Mindtree plunged as much as 4.21 per cent in the intraday trade on Thursday after foreign brokerage firm Citi Research downgraded the stock to "sell" from "neutral", said a Reuters report. However, the brokerage raised the target price to Rs 970 from Rs 875, earlier.
Mindtrees business has seen a good turnaround, but this is priced into strong returns delivered in past 6 months, Citi said in a note. "While near-term visibility looks decent, any slowdown from its top customer – which contributed 18 per cent to overall revenues in Q4 – is a risk, the brokerage firm added.
Citi said that justifying multi-year high valuations and significant premium to the sector is difficult, given volatile performance over past few years, sectoral challenges and client concentration risk.
As much as 66,000 shares traded in today's trade on BSE against the two-week average of 39,000.
Eight of the 27 analysts covering the stock have a 'buy' or higher rating, 9 have 'hold' while 10 rate it at 'sell' or lower with a median target price of Rs 850, said Thomson Reuters data.
Up to Wednesdays close, the stock had risen 68 per cent compared with a 20.3 per cent gain in the Nifty IT index this year.
At 02:06 pm, shares of the company were trading at Rs 992.20 apiece on BSE, down 3.67 per cent.