LTM Share Price Target Set at Rs 3,450 as Citi Maintains Sell Rating After Flat Q1 Revenue

The LTM share price target has now been set at Rs 3,450 by brokerage Citi, which maintained its sell rating on the IT services company after its June quarter results showed revenue was largely flat on a sequential basis. The cautious stance from Citi comes even as the stock has seen positive news flow today around its newly announced Anthropic partnership.

Citi noted that while LTM‘s EBIT margin benefited from lower selling, general and administrative expenses during the quarter, subcontracting costs increased to 9.6 percent of revenue, a trend the brokerage will be watching closely in subsequent quarters. Management, according to the note, expects growth to resume in the September quarter and strengthen further in the second half of the fiscal year.

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LTM Share Price Target: Citi Key Takeaways

Citi’s detailed note lays out both the near-term operational challenges and the longer-term growth expectations that are shaping its cautious LTM share price target, giving investors a fuller picture of the brokerage’s thinking beyond the headline sell rating.

Parameter	Detail
Rating	Sell (maintained)
Target price	Rs 3,450 per share
Q1 revenue	Largely flat quarter-on-quarter
Subcontracting costs	Increased to 9.6 percent of revenue
Management guidance	Growth to resume in Q2, strengthen in H2
Organic revenue CAGR expectation	5 percent over FY26-28
Valuation	19.5x FY27 consensus earnings

At 19.5 times FY27 consensus earnings, Citi believes the stock’s current valuation does not adequately reflect the near-term growth challenges, which is the core rationale underpinning Citi’s below-market LTM share price target of Rs 3,450 for the stock.

Why Citi Is Cautious on the LTM Share Price Target

1. Flat Sequential Revenue Growth

Largely flat quarter-on-quarter revenue is a soft outcome for an IT services company, particularly at a time when peers like TCS and HCL Technologies have shown more visible momentum. This relative underperformance is a key factor behind Citi’s conservative LTM share price target. A prolonged period of underperformance relative to sector leaders can also weigh on investor sentiment even when profitability metrics, such as EBIT margin, show sequential improvement driven by cost control rather than revenue growth.

2. Rising Subcontracting Costs Pressure Margins

Subcontracting costs climbing to 9.6 percent of revenue indicate the company may be relying more heavily on external talent to service client engagements, which can compress margins if not managed carefully. Citi will likely watch this metric closely in coming quarters as a signal of underlying operating discipline. A rising reliance on subcontracted resources can also complicate quality assurance and client delivery consistency, both of which matter for renewal rates on large, multi-year engagements.

3. Growth Recovery Hinges on Management Execution

While management has guided for growth to resume in the September quarter and strengthen further in the second half of the fiscal year, Citi’s cautious stance suggests the brokerage wants to see this materialise in actual reported numbers before turning more constructive on the stock and revising its LTM share price target higher. Until that recovery is visible in reported numbers, the LTM share price target is likely to stay anchored closer to Citi’s conservative estimate than to more optimistic brokerage views.

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Balancing the Sell Rating Against Today’s Anthropic Partnership News

Notably, Citi’s cautious note on the LTM share price target comes on the same day the company announced a strategic partnership with Anthropic to accelerate enterprise Claude adoption, a development that lifted the stock in early trade. Investors should weigh the near-term operational concerns flagged by Citi against the longer-term strategic potential of the AI partnership, recognising that these two distinct narratives operate on very different time horizons in terms of their ultimate impact on the LTM share price target.

The 5 percent organic revenue CAGR expectation over FY26-28 embedded in Citi’s model is relatively modest for an IT services company, and any evidence of the AI partnership translating into incremental deal wins beyond what is currently baked into estimates could prompt a reassessment of both growth expectations and the LTM share price target itself. Any material upward revision to this growth assumption would be the single biggest lever for a higher LTM share price target from Citi or other brokerages covering the stock.

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Conclusion

Citi has maintained its sell rating on LTM with an LTM share price target of Rs 3,450, citing largely flat Q1 revenue and rising subcontracting costs, even as the company sees management guidance for a growth recovery in the second half of the fiscal year. The cautious note stands in contrast to today’s positive Anthropic partnership news, creating a mixed near-term picture for the stock. Investors should track quarterly execution against management’s guidance and consult a SEBI-registered advisor before making investment decisions.

Frequently Asked Questions FAQs

What is the LTM share price target set by Citi?

Ans. Citi has set an LTM share price target of Rs 3,450 per share while maintaining its sell rating on the stock.

Why did Citi maintain a sell rating on LTM?

Ans. Citi maintained its sell rating because Q1 revenue was largely flat quarter-on-quarter and subcontracting costs increased to 9.6 percent of revenue, even as EBIT benefited from lower SG&A expenses.

What is LTM’s expected organic revenue growth according to Citi?

Ans. Citi expects LTM to deliver a 5 percent organic revenue CAGR over FY26-28, according to its research note.

At what valuation does LTM currently trade?

Ans. According to Citi’s note, LTM trades at 19.5 times FY27 consensus earnings, which the brokerage believes does not adequately reflect near-term growth challenges.

When does management expect LTM’s growth to resume?

Ans. Management expects growth to resume in the September quarter, or Q2, and to strengthen further in the second half of the fiscal year.

Does the Citi sell rating conflict with the Anthropic partnership news?

Ans. The Citi note and the Anthropic partnership announcement came on the same day, creating a mixed picture. The sell rating reflects near-term operational concerns, while the partnership represents a longer-term strategic opportunity.