Centrum becomes the first major house to recommend the stock as a thematic buy..excerpts as follows:
Intense Technologies Ltd
Niche offering in digital transformation space
Intense Technologies Ltd. (ITL) is the market leader in Indian Telecom document management and customer communication products. ITL’s UniServe platform enables enterprises to digitize various aspects of customer life cycle management from customer acquisition, gaining customer insights, engaging them through digital channels, delivering world class experience. In FY16, Asia-Pacific accounted for ~57% of revenue followed by Europe and Middle East (42%). Revenue for the company grew at a CAGR of ~21% over FY12-16.
1) Signing of a $25 million Multi-year Managed Service Agreement (MSA) with a leading telecom company in to support further growth;
2) Foray into North American market & inroads into new business verticals like BFSI to provide significant growth opportunities;
3) Launch of UniServe NXT - a platform for business agility in the connected world of Internet of Things (IoT); 4) Strong Q2FY17 performance.
· Stock recommendation based on Technical: ITL is trading in a medium term uptrend and is now moving towards its long term supply levels which are currently placed at near 88-100 range. Buying is recommended for a target of 135 in the coming 8 months for which recommended stop loss at the current juncture is 60.
· Signing of a $25 million Multi-year Managed Service Agreement (MSA) with a leading telecom company in to support further growth: ITL recently signed a multi-year $25 million deal with one of the leading telecom companies in India which further strengthened its market leadership in Indian Telecom industry. Amidst the flat top-line growth for last two years at just 0.7%, the deal provides a near term growth opportunities for ITL.
· Foray into North American market & inroads into new business verticals like BFSI to provide significant growth opportunities: ITL recently announced its collaboration with one of the largest wireless telecom companies in North America (one of the largest software markets) for deployment and support of the ‘UniServe’ platform for reports and analytics. Further, ITL expects to leverage its competitive strength in Telecom & Insurance industry to diversify into other similar verticals like BFSI which would expand its addressable market.
· Launch of UniServe NXT - a platform for business agility in the connected world of Internet of Things (IoT): ITL is planning to launch its new platform UniServeTM NXT which was recognized as the best of Future IT (Emerging technologies) iCMG Architecture Awards panel for 2016. The product would help enterprises in building business agility by digitalizing customer centric business processes swiftly and take on the future opportunities generated by IoT. This could be an additional opportunity to upsell and cross-sell to existing customers.
· Strong Q2FY17 results: In Q2FY17, revenue grew at 200% YoY to ₹19.2 crore while EBITDA grew by 275% to ₹6.9 crore. Net profit stood at ₹6 crore (vs loss of ₹4 crore in Q2FY16). Further, the management is confident of strong earnings momentum to continue in future supported by launch of new platform and expansion of ‘UniServe’ platform into newer verticals and geographies.
1) Low market capitalisation;
2) Company is only listed on BSE and lacks liquidity;
3) Low promoter shareholding.
Centrum Wealth Research