The LTM share price slumped over 5% in early trade today, October 19, after reporting a mixed performance for the second quarter of financial year 2027 (Q2FY27) on Friday, October 16.

Following its earnings, Japanese brokerage Nomura has downgraded LTM to ‘Neutral’ from ‘Buy’, but kept the target price unchanged at Rs 4,410 apiece. This implies an upside of a mere 3% from the stock’s current price of Rs 4,295.9 apiece.

However, domestic brokerage Motilal Oswal has maintained its ‘Buy’ rating on the stock and has a target price of Rs 5,050, implying an upside of nearly 18%.

LTM, formerly known as LTIMindtree, reported a 4.6% sequential decline in consolidated net profit to Rs 1,398 crore even as revenue rose 1.7% to Rs 11,808 crore. The company’s deal wins also slowed in Q2FY27, falling to $1.26 billion from $1.68 billion in the previous quarter.

The company marginally beat Bloomberg estimates of Rs 11,787 crore for revenue but missed the consensus net profit estimate of Rs 1,494 crore. Its earnings before interest and tax (EBIT) rose 2.2% sequentially to Rs 1,838 crore. EBIT margin expanded by 10 basis points to 15.6% from 15.5% in the June quarter.

The tech major’s revenue growth for the quarter was higher than Nomura’s expectation, in constant currency. This growth was led by financial services and production.

Nomura has downgraded LTM to ‘Neutral’ from ‘Buy’. The brokerage downgraded the stock due to “valuations.” The tech major expects its growth in the second half of FY27 to be better than the first half. It sees revenue growth for FY27 in similar lines to FY26, which was 5.3%.

“Top 5, 10 and 20 accounts had growth below the company average in 2Q. LTM management noted that the impact from the Middle East situation was ~0.6%-0.7% on q-q growth numbers. The CEO noted that while the TCV of deal wins looks soft, most of them are short-tenured, AI-centric deals with immediate revenue translation,” Nomura said. The brokerage noted that AI now forms around 13.4% of LTM’s total revenues, up 40% YoY.

Motilal Oswal does not expect LTM’s growth to accelerate in FY27 and has maintained its projection of 5.1% YoY growth in constant currency, as the company;s Middle East business weighed on its performance in Q2FY27. “However, we believe that the outlook for FY28 remains positive,” it said.

Motilal Oswal has maintained its ‘Buy’ rating on the stock and has a target price of Rs 5,050, implying an upside of nearly 18%.

“In 1QFY27, management expected continued organic margin expansion, with consolidated margins at FY26 levels or higher. However, in 2QFY27, it adopted a more cautious stance, guiding for FY27 margins to remain closer to the FY26 level of 15.4%, including Randstad, citing acquisition-related amortisation. Traditional-services pricing pressure and an unfavorable revenue mix could further constrain,” Motilal Oswal said.

“We believe LTM’s FY26-28 USD revenue CAGR of ~6% remains ahead of most large-caps peers, despite the Middle East impact. We expect growth and margins to improve in FY28 as deal TCV pivots toward short-term AI deals, which convert into revenue faster and offer higher margins,” the brokerage added.

The tech major’s Q2FY27 performance was mixed, weighed down by its Middle East business. However, short-term AI deals which can turn in revenue fast offer a better outlook for the coming quarters.