Buy Intellect Design Arena Ltd For Target Rs.849 - Sushil Finance
Purple Fabric to propel growth
Purple Fabric, Intellect Design Arena Ltd’s (IDA) Multi-Agent AI Platform, is set to propel the organisation forward by revolutionising enterprise operations through intelligent automation. The platform improves efficiency in crucial functions such as claims processing, risk management, and compliance by employing AI-powered expert agents, resulting in considerable cost savings and faster turn-around times. Purple Fabric aims to establish IDA as a leader in AI-powered enterprise solutions, as financial institutions prioritise scalable solutions to streamline back-office activities, which account for almost 50% of total BFSI expenditures. Additionally, Purple Fabric has received extremely positive feedback from IDA's partner ecosystems, customers, and prospects.
Strong revenue funnel accelerated by eMAch.ai IDA’s eMACH.
ai has significantly influenced the company, serving as a catalyst for transformation and a key driver for growth and market recognition. The platform's AI capabilities allow financial institutions to automate operations, optimise resources, and make data-driven choices, resulting in increased client happiness and loyalty. The company further appointed industry veteran John Owen as President of the Western Hemisphere for eMACH.ai with the objective to advance the adoption of the platform through his strong client relationships in USA, Canada, South America, Europe, and UK. This strategic move will help expand eMACH.ai’s market reach within these regions, thereby, driving business growth.
Won significant deals in FY25 demonstrating growth and expansion
In FY25, Intellect Design Arena Ltd achieved several significant deal wins across various regions which include large financial institutions in USA, Canada, UK, India, UAE, Hungary, Australia, Kenya, and other key regions around the world. These strategic deals underscore IDA’s expanding global footprint and its commitment to providing innovative digital solutions across the financial services industry.
OUTLOOK & VALUATION
Factoring the various positive triggers for the stock, we expect revenue at Rs.3189.8 cr, EBITDA at Rs.743.3 cr at an EBITDA margin of 23.3% and Adjusted PAT of Rs.469.4 cr. Given the strong growth and margin outlook, we estimate FY27E EPS at Rs.34.0, and assign a PE multiple of 25x to arrive at a target price of Rs.849, which is an upside of ~28.7% from its last closing price of Rs.660. We initiate coverage for Intellect Design Arena Ltd. with a BUY rating, over an investment horizon of 24 months.
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