Thanks for this link
It has a nice video from intellect on a lot of things.
Disclosure: Invested with small amount - scaling up slowly as I research more.
From magic quadrant for global retail banking report
Strengths
The Gartner Financial Rating improved from Caution to Variable in 2019.
Operations are another bright spot for Intellect, as maintenance fees are the lowest across the examined vendors in this Magic Quadrant, and minor releases (issued twice a year) consolidate patches and services packs.
Intellect Digital Core shows a greater than the average number of exposed microservices, according to the list provided to Gartner, and a moderate commitment to microservices architecture.
Cautions
Intellect Design Arena had the highest decline in overall customer experience across the examined vendors in the evaluation of 2018 through 2019 project deliveries, with a significant drop in the implementation experience.
The cloud offering is very limited for this vendor, which has previously installed its product on some private clouds and a few installations in public cloud.
Intellectâs deployment ecosystem is considered weak by Gartner. The company delivers projects largely autonomously by consultants traveling from its few hubs to clientsâ sites and supports them from India.
As mentioned by @kenshin quoting from the magic quadrant for global retail banking report, isnât the drop in customer experience a significant risk? Given that there is a lot of competition that Intellect faces across all of its product verticals, while switching costs for existing customers may not be low, a reputation of poor customer exerience can be a major hinderence for new customer aquisitions. This against the backdrop of the huge rally and reasonable valuations donât leave much margin of safety as far as I can make out. The risk-reward doesnât seem too favourable in comparison to other opportunities in the market for me.
Would love to hear contrary views and am happy to reconsider my thesis.
The report was published last year, i.e. 2020, and takes into account the data for the time period of 2018-19.
Q4 Results
Good - $54.12mn of 4Q21 revenue
Not so good - EBITDA margin down to 25% in 4Q21 from 25.5% in 3Q21
4Q21 Net income flat vs. 3Q21
Suspect stock will be down tomorrow
https://archives.nseindia.com/corporate/INTELLECT_10052021202828_outcomeofbm_may102021final.pdf
There is an 8 cr. rise in âother expensesâ qoq which has offset the decent revenue growth.Company has been guiding for 280-85cr. kind of quarterly costs so this is definitely a -ve surprise.Need to know what led to this and whether this is a non-recurring,one-off.Otherwise business direction remains decent.If I see brokerage reports then no one was building in such margins for FY21 so it seems like a âbeatâ but given the run up in stock in recent weeks maybe the implicit expectation was of better margins.
I believe the recent run up was mainly because of the recent deals won by the company and the price momentum may continue in the coming days because of the exponential growth expected.
The investor presentation is here - https://archives.nseindia.com/corporate/INTELLECT_11052021093754_Investrorpresentation_May112021.pdf
Not much incremental information. On a lighter note the below chart caught my attention. The y-axis makes almost no sense.
Intellect Design Earnings Call for Q4FY21:
Dolat report on IDA post 4Q21 (source Bloomberg Quint) - https://images.assettype.com/bloombergquint/2021-05/12898f3b-173b-4a0a-beb2-68b5a894cd72/Dolat_Capital_Intellect_Design_Q4FY21_Result_Update.pdf
Nothing major. They are broadly in line with company guidance -
Revenue 15% - 20% growth
EBITDA - close to 30% margin
EPS - c.30% growth
For what itâs worth, they estimate Rs.700Cr of net cash by FY23 end. Assuming a 60% EBITDA to FCF conversion (this is the median for OFSS since 2015), we could be looking at FCF yield of +3% on current price levels. In addition to growth, a dividend angle also appears to be gradually developing.
In the very near term, with the stock already at 36x FY21 EPS and 28x FY22 EPS, I doubt the stock will see any dramatic moves on either side before 1Q22 results.
But one thing to be seen is the addition of clients if any will have positive impact on the price.
EDIT: The below might be linked to inclusion in the MSCI India Small Cap Index. Hence not really linked to company fundamentals. https://www-goodreturns-in.cdn.ampproject.org/v/s/www.goodreturns.in/amphtml/news/msci-semi-annual-index-review-adds-6-stocks-to-india-index-33-to-small-cap-index-complete-list-1209415.html?amp_js_v=0.1#origin=https%3A%2F%2Fnews.google.com&prerenderSize=1&visibilityState=visible&paddingTop=0.01&history=0&p2r=0&storage=1&development=0&log=0&cap=cid&csi=0&cid=1
There was huge delivery based buying yesterday
It happened in the last 30 mins
Destiny deal win.
https://archives.nseindia.com/corporate/INTELLECT_31052021110531_Media_Release_Dated_31052021.pdf
Six year cloud-based deal
Hello,
I have heard this multiple times. Even from the CEO. What is âdestiny dealâ?
Note: Invested small amount - reading up to inc/exit holding.
A Destiny Deal will give significant opportunity in terms of revenue and cross sale to IDA in that particular account. And also add as a reference point to sell their solutions in other similar customers/banks in that country.
A destiny deal is one
1)that is valued 40-50 crores contract value ( on mature products like iGTB and intellect core) - this info is gleaned from conf calls over time.
Destiny deals for different products (like SEEC vs iGTB )will be different.
Intellect follows a strategy of going after the top 2- 3 customers in their target segment . According to them if you are able to sell to them all the other customers want you too and you can get better pricing.
Long answer to a short question but I hope it helps
Dis: invested
Does anyone have list of competitors with whom Intellect Design Competing for the market share.
I donât think anyone from India are competing with IDA (maybe TCS or Infosys has one or two products, but no where near the tech capabilities of IDA). But foreign companies like Palantir, Finastra, Mambu, Temenos etc., are their competitors.
