Reliance Securities has recommended 'Buy' on MindTree with target price of Rs 1,600 in its report.

Commenting on the investment rationale, the stock broker said, ''Mindtree's growth is expected to be led by digital, which currently contributes ~34% to the revenue and it has recently bagged SAP implementation and maintenance contract from Monlycke Health Care, healthcare provider with presence in 32 countries.

We are positive on the company based on 1) growth in SAP HANA consulting and CPG solutions with acquisition of BlueFin and Relation Inc, 2) strong momentum in digital (increasing deal size and USD 100 million deal-funnel), 3) robust contract bookings (deal TCV 30% higher in Q1 than FY15 quarterly-average), 4) Europe business recovery from 2HFY16E and 5) continued strength in top-account mining.

We expect Mindtree's USD revenue and EPS to grow at 17% and 18% CAGR over FY15-17E. We have a Buy recommendation on the stock with a target price of Rs 1,600; at CMP the stock trades at 16.6x its FY17E earnings.''

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