Mehabe score: 5 G Factor: 3 Piotski Score: 6 The stock has a rating SELL. The mehabe team score is reflective of its fundamental and technical merits. A rating above 8 is considered good buy. The stock has a G-Factor of 3 and Piotski score of 6.
Description
Intellect Design Arena has a comprehensive portfolio of products across Global Consumer Banking, Central Banking, Risk & Treasury Management, Global Transaction Banking and Insurance and is engaged in the business of software development.(Source : 202003 Annual Report Page No: 71)Site:INTELLECTMain Symbol:INTELLECT
Stock trades at 712.0, below its 50dma 719.54. However it is trading above its 200dma 525.58. The stock remains weak in the short term due to near term bearish momentum. However overall bullish structure remains intact. Price action will further build up as it moves above its dma50, currently situated at 719.54.
The 52 week high is at 848.50 and the 52week low is at 112.00
Price Chart
P/E Chart
Sales and Margin
Strengths
– has reduced debt.
– is almost debt free.
– has delivered good profit growth of 62.34% CAGR over last 5 years
-Debtor days have improved from 57.91 to 45.52 days.
Weakness
– Stock is trading at 6.84 times its book value
-Though the company is reporting repeated profits, it is not paying out dividend
-Promoter holding is low: 31.23%
-Tax rate seems low
– has a low return on equity of 12.85% for last 3 years.
Competition
– The industry trades at a mean P/E of 32.2x. Happiest Minds trades at the industry’s max P/E of 108.63x. INTELLECT trades at a P/E of 36.2x
– Industry’s mean G-Factor is 3.8 while the mean Piotski score is 9.0. INTELLECT has a G-Factor of 3 and Piotski scoreof 6.
– Average 1 month return for industry is 9.0%. The max 1- month return was given by Happiest Minds: a return of 27.78 %
Quarterly Results
Sales for period ended Mar 2021 is Rs 398.0 cr compared to Rs 358.0 cr for period ended Mar 2020, a rise of 11.2%
Operating Profits reported at Rs 100.0 cr for period ended Mar 2021 vis-vis 56.0 for period ended Mar 2020 .
Operating Margins expanded 948.3 bps for period ended Mar 2021 vis-vis Mar 2020 .
The EPS for Mar 2021 was Rs 6.06 compared to Rs 6.06 for previous quarter ended Dec 2020 and Rs 3.1 for Mar 2020
Profit & Loss Statement
Profit&Loss Comments
Company reported sales of Rs 1497.0 cr for period ended Mar 2021 vis-vis sales of Rs 1347.0 cr for the period ended Mar 2020, The 3 year sales cagr stood at 11.3%.
Operating margins expanded to 24.0% for period ended Mar 2021 vis-vis 6.0% for period ended Mar 2020, expansion of 1800.0 bps.
Net Profit reported at Rs 263.0 cr for period ended Mar 2021 vis-vis sales of Rs 16.0 cr for the period ended Mar 2020, rising 93.9%.
Company recorded a healthy Net Profit CAGR of 77.5% over the last 3 years
Balance Sheet Statement
Cash Flow Statement
Cash Flow comments
CashFlow from operating activities was positive.
CashFlow from operating activities: Rs 463.0 cr for period ended Mar 2021 vis-vis Rs 44.0 cr for period ended Mar 2020
Sales Growth
Profit Growth Statement
Profit Growth Statement
Stock Price CAGR
Return of Equity
General Comments
– The company has improved its Return on Equity (RoE) metric. The RoE on Last Year basis was 22.0% compared to 13.0% over the last 3 Years. – The stock has given a return of 542% on a 1 Year basis vis-vis a return of 54% over the last 3 Years. – The compounded sales growth on a TTM bassis is 11% vis-vis a compounded sales growth of 11% over the last 3 Years. – The compounded profit growth on a TTM basis is 2073% vis-vis a compounded profit growth of 92% over the last 3 Years.
Ratios
Shareholding Pattern
– FII shareholding has risen for the period ended Mar 2021. The Mar 2021 fii holding stood at 27.21% vis-vis 24.12% for Dec 2020 – Public shareholding has remained largely constant. The Mar 2021 public holding stood at 37.85% vis-vis 39.13% for Dec 2020
Conclusion
– has reduced debt.
– is almost debt free.
– has delivered good profit growth of 62.34% CAGR over last 5 years
-Debtor days have improved from 57.91 to 45.52 days. – Stock is trading at 6.84 times its book value
-Though the company is reporting repeated profits, it is not paying out dividend
-Promoter holding is low: 31.23%
-Tax rate seems low
– has a low return on equity of 12.85% for last 3 years.
Fundamentally, the stock remains weak. The business fundamentals are on shaky ground. Weak near term results have dampened and questioned business drivers. We suggest to wait for a upturn in business performance.
Technically, the stock reflects the poor fundamentals. The stock remains below its 50 DMA 719.54 and is trading at 712.0. It has shown near term lack of bullish momentum. We suggest to observe price action. However as investors, who like to avoid timing the markets, we suggest to avoid the stock
