Q3FY21 Company Update - Intellect Design Arena - ICICI Direct

Intellect Design reported Q3FY21 numbers. Dollar revenues increased 3.4% QoQ (up 15.2% YoY) mainly led by 21.2% QoQ growth in cloud segment and 5.9% QoQ growth in implementation, partially offset by 7.6% QoQ decline in licence revenues. EBITDA margin increased 195 bps QoQ to 25.2%. The PAT increased 35% QoQ to Rs. 80.4 crore due to higher other income and higher share of profits from associates. The company had 20 digital wins including 11 large digital transformation deal wins.

Valuation & Outlook

Improving large deal trajectory, traction in iGCB revenues, penetration in the US market, digital-ready product portfolio, healthy orderbook, huge addressable & underpenetrated market and improved annuity revenues are key long term drivers of revenues. In addition, improving cash flow (led by lower working capital & improving margins) and deleveraged balance sheet prompt us to be positive on the stock. Hence, we maintain our BUY rating on the stock with a revised target price of Rs. 455 (3.3x FY20 price/sales & 15x P/E on FY23E EPS) (earlier target price was Rs. 260).

For details, click on the link below: https://www.icicidirect.com/mailimages/IDirect_Intellect_CoUpdate_Feb21.pdf

Shares of Intellect Design Arena Ltd was last trading in BSE at Rs.379.5 as compared to the previous close of Rs. 361.45. The total number of shares traded during the day was 3054 in over 61 trades.

The stock hit an intraday high of Rs. 379.5 and intraday low of 379.5. The net turnover during the day was Rs. 1158993.

Source : Equity Bulls

Keywords