Intellect Design (INTELLECT)
Fast GrowerFairStock Score: 58/100 — STEADY
Score breakdown: P/E: 1/3 · ROCE: 1/2 · Growth: 0/2 · Dividend: 0/1
Key Financials
| Current Price | ₹700.6 |
| Market Cap | ₹9,761.06 Cr |
| P/E Ratio | 28.17 |
| ROCE | 16.76% |
| ROE | 12.94% |
| Dividend Yield | 0.57% |
| Profit Growth | 8.1% |
| Debt/Equity | 0.05 |
| Sales Growth | 20.4% |
| Free Cash Flow | ₹187.4 Cr |
| Promoter Holding | 29.81% |
| 52-Week Range | ₹595.2 — ₹1,244.6 |
| Sector | IT - Software |
| Book Value | ₹228.5 |
Strengths
- Revenue and profit growth are strong at 22% and 33% respectively, showing demand traction.
- Very low debt (D/E 0.03) and a healthy Piotroski F-Score of 7 point to solid financials.
- Free cash flow of ₹187 Cr provides a cushion for operations and investments.
- Altman Z-Score of 3.50 indicates a low risk of financial distress.
Concerns
- Valuation is stretched: P/E 25.8 and P/B 3.52, with a deeply negative margin of safety versus Graham Number of ₹345.25.
- Latest quarter net margin is razor-thin at ~3.7% (₹27 Cr profit on ₹731 Cr sales), suggesting weak pricing power.
- Promoter holding of 29.81% is modest, which may raise governance alignment concerns.
- DCF intrinsic value of ₹18.84 and negative EV/EBITDA warrant deeper scrutiny.
AI Analysis
As a value investor, I first ask if I understand the business. Intellect Design provides software to banks and financial institutions—a niche I can grasp. But understanding is not enough; the numbers must make sense. The company has grown sales at 22% and profits at 33%, which is impressive. Yet my favorite metric is not growth alone but the return on equity and capital. ROE is 12.94% and ROCE 16.76%—respectable, but not the outsized returns of a great franchise. The balance sheet is sound, with a debt-to-equity of just 0.03 and a Piotroski score of 7, indicating healthy financials. Free cash flow at ₹187 Cr gives some breathing room. However, I cannot ignore valuation. At ₹702, the P/E is 25.8 and price-to-book 3.52. My Graham Number of ₹345.25 suggests a margin of safety that is deeply negative—over 100% below the price. The DCF value of ₹18.84 is even more frightening, though I treat such models with care. The latest quarter also worries me: sales of ₹731 Cr produced only ₹27 Cr in profit, a razor-thin net margin. That is not the kind of pricing power I like. Promoters hold only 29.81%, below what I'd want for long-term alignment. In Buffett's words, 'It's better to buy a wonderful company at a fair price than a fair company at a wonderful price.' Here I have a growing company, but I am being asked to pay a wonderful price for a fair company. I'd rather wait for a margin of safety that protects my capital.
Data from BSE/NSE filings. AI analysis is for educational purposes only — not investment advice. Scoring methodology · Disclaimer