Money Tree

Mindtree Consulting has crossed 900 mark in the morning, much above our expectations and at this price the company seems to be a bit costly. We recommended a buy at below 800 levels and now the investors who have entered on our advice or who have got an allotment are in good profits, we recommend an exit at around Rs. 900 levels as it will be a bit risky to remain invested above this level.

The stock has a PE ratio of more than 42 for FY07 at Rs. 900 which is costlier than most of the listed IT stocks which are quoting at 35 to 40 PE ratio. There was a rumour that Mindtree is going to buy a company, but the management has yet not confirmed any such news, therefore we expect the stock to correct from this level unless there is some positive price sensitive news.