Intellect Design Arena zooms 69% so far in March on healthy revenue outlook

Healthy traction in IGCB and iSEEC is expected to drive revenues going forward

Shares of Intellect Design Arena surged 9 per cent to hit a new high of Rs 733.50 on the BSE in intra-day trade on Monday. The stock has rallied 69 per cent thus far in the month of March on expectations of a strong revenue outlook. In comparison, the S&P BSE Sensex has added 1.5 per cent during the same period.

At 09:52 am, the stock was quoting 2 per cent higher at Rs 688 as against a 0.06 per cent decline in the benchmark index. A combined around 750,000 equity shares had changed hands on the counter on the NSE and BSE so far.

On March 10, Intellect Global Transaction Banking (iGTB), the transaction banking specialist from Intellect Design Arena, was ranked number 1 in the world for Transaction Banking by IBS Intelligence. The Hanoi-headquartered Vietcombank announced that the firm has now deployed iGTB’s next-generation Digital Transaction Banking Enterprise Suite (DTB).

That apart, in a separate regulatory filing on March 8, the company announced the launch of Magic Aadhaar, an Al-powered comprehensive Aadhaar processing solution to identify, extract, validate and mask Aadhaar details. It hyper digitises the end-to-end processes using Aadhaar-based processing.

In the October-December quarter (Q3FY21), Intellect Design Arena registered healthy revenues. The company also won six large deals in the quarter indicating improving revenue visibility in coming quarters. In addition, the company has a healthy order backlog of Rs 1,203 crore, a strong deal funnel (around Rs 4,162 crore) and a digital-ready product portfolio that provides confidence in an improved revenue trajectory in coming years.

Healthy traction in IGCB (Intellect Global Consumer Banking) and iSEEC is expected to drive revenues going forward. 

"This coupled with penetration in the US market, digital-ready product portfolio, healthy order book, huge addressable and underpenetrated market and improved annuity revenues are key long term drivers of revenues. In addition, improving cash flow and deleveraged balance sheet prompt us to be positive on the stock from a long-term perspective," ICICI Securities said in a stock update.

However, the recent run-up in stock price prompts us to downgrade the stock from BUY to HOLD with a revised target price of Rs 640, the brokerage noted, in a March 18 report.