Intellect Design (INTELLECT)

FairStock Score: 58/100 — STEADY

Score breakdown: P/E: 1/3 · ROCE: 1/2 · Growth: 0/2 · Dividend: 0/1

Key Financials

AI Analysis

AI-generated, general educational analysis — not personal investment advice.

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.

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Data from BSE/NSE filings. AI analysis is for educational purposes only — not investment advice. Scoring methodology · Disclaimer