Intellect Design Arena share price: Hold Intellect Design Arena, target price Rs 815: ICICI Direct

ICICI Direct has hold call on with a target price of Rs 815. The current market price of Intellect Design Arena is Rs 733.7. Time period given by analyst is one year when Intellect Design Arena price can reach defined target.

Intellect Design Arena Ltd., incorporated in the year 2011, is a Small Cap company (having a market cap of Rs 9844.95 Crore) operating in IT Software sector.

Financials
For the quarter ended 30-06-2021, the company reported a Consolidated Total Income of Rs 424.68 Crore, up 6.07 % from last quarter Total Income of Rs 400.38 Crore and up 20.08 % from last year same quarter Total Income of Rs 353.66 Crore. Company reported net profit after tax of Rs 78.70 Crore in latest quarter.

Investment Rationale
Intellect’s share price has grown by ~4x over the past five years (from ~Rs 205 in July 2016 to ~Rs 745 levels in July 2021. Improving deal wins, deal pipeline (| 4,630 crore), increased penetration in US & Europe, improving quality of revenues (licence + AMC + Cloud from 46% in FY20 to 54% in FY21) bode well for long term revenue growth. The company aspires to achieve 14-16% CAGR in revenues over the next five years. However, the near term impact of Covid prompts to factor in 13% CAGR in dollar revenues. It is expected to post 431 bps improvement in margins to 28% in FY21-23E.