MOSL: MINDTREE (Buy)-Driving change to ensure leadership beyond Digital

MindTree: Driving change to ensure leadership beyond Digital

(MTCL IN, Mkt Cap USD2.5b, CMP INR1099, TP INR1260, 15% Upside, Buy)

We attended Mindtree's (MTCL) analyst meet, where the company highlighted its roadmap to maintain leadership in Digital over the medium term and also invest in new areas beyond Digital for long-term sustainable growth. Changing technologies are likely to result in a business-model transformation, and MTCL is expected to take a more solutions- and product-centric approach to its future offerings.

• MTCL's strategy for industry-leading growth and improving profitability is focused on four pillars: [1] Digital packages and platforms. [2] A consulting-first approach. [3] Focus on innovation. [4] Humane automation.
• With 47% of revenues derived from Digital, MTCL has been ahead of peers in recognizing trends and capitalizing on them. While competitors are still working on traditional models, MTCL has moved to outcome-based and solution-based models.
• A strong leadership, expansive mindset and innovative culture are likely to propel its positioning in Digital. Moreover, agility, consulting-led expertise and IP-led solutions are expected to drive its long-term objective of enterprise re-imagination.

Accelerated shift in the market: The Indian IT sector has been witnessing a transformation away from traditional models, led by: [1] a shift to packaged applications, [2] composite end-to-end services, [3] introduction of new technologies like automation, IoT and cognitive automation, and [4] new developments on the political front. These forces are paving way for a play in Digital, led by innovation and a partnership-led approach with customers.