Buy Intellect Design Arena: target of Rs 900: Sharekhan

Sharekhan's research report on Intellect Design Arena

We believe Intellect Design has invested well in its product portfolio and platforms over time, which positions it to capture opportunities across segments. Company recorded 32 digital-led wins in FY2021. We expect Intellect Design to report 21.3% y-o-y revenue growth in Q1FY2022 led by traction for products and strong growth momentum in SaaS revenue. EBITDA margin would also improve on q-o-q. The management expects EBITDA margin to gradually improve to 30% by Q4FY2022. Revenue/earnings are expected to clock a 17%/29% CAGR over FY2021-FY2023E, aided by strong traction for products and rise in margins.

Outlook

We maintain a Buy on stock with an unchanged PT of Rs. 900, given strong earnings growth potential and increasing adoption of digital offerings.

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