Buy Intellect Design Arena; target of Rs 330: Dolat Capital Market

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26 Aug, 2025 12:21

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Dolat Capital Market's research report on Intellect Design Arena

Intellect Design Arena is one of the fastest growing Banking Software company in the World with wide IP offering across spectrum of BFSI sub segments. Powered with significant investments in R&D (over Rs10bn since demerger in FY14) and S&M (Rs17bn) the company has created strong presence, reach and brand appeal for its product offerings across markets and same is evident from several marquee client wins, improved deal size and high ratings across Industry expert rankings. The company has reported robust industry leading 14% CAGR in $ revenues over FY14-20, however the same has not percolated into profitability/cashflow given Company’s all in strategy (multi-market, multi-region) that has resulted in large front-loading of investments. But now with two of its largest LOBs (iGTB and iGCB – collectively 70% of revenues) have gained ideal scale and maturity we expect significant improvement in financial metrics (led by improved AMC, reduced implementation cycle, improved acceptance of its brand etc) of the business hereon.

Outlook

We continue to remain positive in the segment given the favorable tailwinds from digital acceleration prospects and initiate coverage on INDA with a DCF based TP of Rs330 per share (implies 15x on FY23E earnings, 1.2x on PEG).

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