February 14, 2017 / 13:54 IST
Intellect Design Arena (INDA) disappointed this quarter with a 2.7% QoQ (-2.4% CC) drop in US$ revenues (US$ 33.6mn vs est of US$ 37.0mn) and poor cost management. The dip in revenues was largely due to the deferral of two large deals, as banks in the US and Europe are largely keeping their-spends on hold.
Outlook
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We maintain our positive stance backed by (1) its highly-rated and diversified product portfolio, (2) marquee client list, (3) huge addressable opportunity, and (4) only around 20% of current product portfolio in monetisation stage. We cut our US$ revenue estimates by 6.6/13.8% for FY17/18E to factor in deal deferrals. Maintain BUY with a TP of Rs 226 based on a 2.5x Dec-18 EV/revenue multiple.
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