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Last Updated : May 21, 2018 06:20 PM IST | Source: Moneycontrol.com

Buy Intellect Design Arena; target of Rs 275: HDFC Securities

HDFC Securities is bullish on Intellect Design Arena has recommended buy rating on the stock with a target price of Rs 275 in its research report dated May 07, 2018.

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HDFC Securities' research report on Intellect Design Arena


Intellect  Design Arena (INDA) posted robust 4QFY18 both on the revenue and margin  front.  Revenue  stood  at  USD 47.7mn (higher than our est. of USD 43.6mn),  up  14.1%  QoQ and 27.6% YoY. Growth was driven by higher license component  (+42.3%  YoY).  The  company  has  a  strong order backlog of Rs 10.40bn  (excluding  GeM  project)  which  is ~79% of FY19E revenue. EBITDA margin  expanded  207bps QoQ to 8.0% (in-line with our est. of 8.0%). There is  non-linearity  in  the  business and margins will expand with growth in licence revenue (led by new deal wins).

Outlook

We expect quarterly swings in revenue (1QFY19E will  be soft), top-line growth will be fuelled by new deal wins, and margins will increase with operating leverage. The stock is up 44% in the last six months, and we expect this momentum to continue.

For all recommendations report, click here


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First Published on May 21, 2018 06:20 pm
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