CLSA Predicts LTM Revenue to Double Over Five Years Led by AI-Fueled Growth

CLSA Reiterates Bullish Stance on LTM Ltd Amid AI Adoption Opportunities

Shares of LTM Ltd are likely to remain in focus on Thursday after brokerage firm CLSA reiterated its bullish stance on the technology services company, even as the stock fell sharply in the previous session. The brokerage cited significant opportunities from artificial intelligence adoption and management's ambitious growth targets.

CLSA maintained its Outperform rating on LTM (LTIMindtree) stock with a target price of Rs 5,755 per share, implying potential upside of about 42 percent from Wednesday's closing price of Rs 4,054. This comes a day after LTM shares fell 6.6 percent amid a broader selloff in information technology stocks.

The stock has declined 9.1 percent over the past year, underperforming the Nifty 50's 4.9 percent decline during the same period, giving the company a market capitalisation of about Rs 1.29 lakh crore. CLSA's optimism comes as the company targets a doubling of revenue over the next five years, with inorganic growth expected to contribute 15-17 percent of that expansion.

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A key pillar of the growth strategy is artificial intelligence (AI). CLSA said management expects AI to expand the global information technology services total addressable market (TAM) to about $2.3 trillion, creating a much larger opportunity set for technology services providers. The brokerage's constructive view contrasts with some recent concerns that AI could reduce demand for certain traditional IT services.

Instead, CLSA believes the technology could become a significant growth driver as enterprises accelerate digital transformation and AI adoption initiatives. The company's latest product announcement also shows its AI focus. LTM recently launched a managed Secure Service Edge (SSE) solution in collaboration with Cisco.

Built on Cisco Secure Access, the offering is designed for cloud-first and hybrid work environments. The solution combines Cisco's security platform with LTM's AI-powered managed services. It would help enterprises secure access to applications while enabling the safe use of AI applications and AI models. Yesterday, LTM stock had fallen after brokerages differed sharply on how artificial intelligence (AI) could shape the company's growth prospects.

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