Intellect Design Arena Limited

Technology — Software - Application · NSE

₹647.00+₹13.25 (+2.09%)

DalalBaazaar Score

63 / 100

🟢 Good

Verdict

REASONABLE

Risk

Moderate

Driven by high debt relative to equity, small-cap size, which brings sharper price swings.

In simple words: Reasonable but unspectacular business quality, with modest growth. Debt is the main factor to watch.

Decision support, not a buy or sell call.

As of 18 Oct 2026, 6:59 pm

Understanding the Business

Company site ↗

The 60-second version of Intellect Design Arena Limited — what it does, how it earns, and who it competes with, before any of the numbers below.

What does this company do?

Intellect Design Arena Limited engages in the development, marketing, and sale of integrated banking software systems in India and internationally.

IndustrySoftware - Application

SectorTechnology

Employees6,876

Annual revenue₹3,038 Cr

How does it make money?

Turns over ₹3,038 Cr a year. Of every ₹100 of sales, about ₹11 reaches shareholders as profit, with ₹24 left at the operating level before interest, tax and depreciation. Each of its 6,876 employees supports ₹44.2 lakh of revenue a year, the signature of a people-led business.

Revenue / employee₹44.2 lakh

Who are its competitors?

The closest listed comparisons in its industry are TATA CONSULTANCY SERV LT, INFOSYS LIMITED, HCL TECHNOLOGIES LTD, WIPRO LTD. These are the companies its valuation and returns are measured against elsewhere in this report.

Compared side by side in Peers ↓

What is its competitive advantage?Little sign of one

Returns on capital of 13.7% are at or below what the capital likely costs. That is the financial pattern of a business competing largely on price, where advantage has to come from execution rather than position.

Peer median ROE32.0%

What is the outlook?

4 analysts covering the stock expect revenue to grow about 12.9% and earnings to grow about 25.9% in the year to 2028. These are estimates by people who follow the company, not a forecast for the wider industry.

Est. revenue growth+12.9%

Est. earnings growth+25.9%

Analysts4

What has been driving growth?

Growth has come mainly from selling more, rather than from keeping more of each sale. Over 3 years revenue moved +36% while net margin moved -5% relative to itself. What this cannot tell you is which products, customers or geographies did the work — that lives in the segment disclosures of the annual report.

Revenue effect+36%

Margin effect-5%

DalalBaazaar Score

63/ 100

Good

Weighted across six categories. Every point is explained below.

✓ Beta of 0.67 — historically steadier than the index
✗ Small Cap: thinner liquidity and sharper drawdowns are normal
✗ High leverage magnifies any downturn in earnings
✓ Profits have been consistent from year to year

Quality vs. Valuation

Company Quality

64/ 100

Average

How good the business is, ignoring the share price entirely.

Valuation

52/ 100

Fair

What you are being asked to pay, ignoring how good the business is.

A reasonable business at a reasonable price — neither the quality nor the valuation stands out in either direction.

Historical Valuation

Current P/E

26.0x

3Y Median

38.7x

40 monthly readings · mean 39.3x · range 25.2x–57.5x

Sector Median

16.5x

median of 4 sector peers

🟢Current valuation is approximately 33% below its 3y median of 38.7x. Cheaper than its own history, which is worth a reason too: the market may be pricing in something the backward-looking numbers do not show.

⚠️Against its sector it trades 57% above the peer median of 16.5x.

vs. its own history

Cheap

38.7x median over 40 months · -33%

vs. sector peers

Expensive

16.5x median of 4 peers · +57%

vs. generic bands

Fair

15x–35x

EV/EBITDA

12.1x

PEG

2.91

What's Good / What's Bad

🟢 What's Going Well2

Cash generation is improving
Free cash flow is up 3320% over 3 years.
Consistently profitable
Profitable in every one of the last 4 reported years.

🔴 What Needs Attention1

Return on capital is falling
ROCE has declined from 17.6% to 13.7% — often a sign of competition or overexpansion.

Red Flags

3 items require attention · 2 high · 1 watch

🔴Debt has risen sharplyFinancial
Total debt is up 485% over 3 years, from ₹27 Cr to ₹159 Cr.
🔴High leverageFinancial
Debt/Equity of 4.96x — earnings must service borrowings before shareholders see anything.
🟡Receivables growing faster than salesFinancial
Receivables up 63% against revenue up 36% — sales are being booked faster than they are collected.

Investment Thesis

🟢 Bull CaseWhat could make this work?

Priced below its own history
The stock trades 33% below its own median multiple. If the business performs as it has and simply re-rates back to normal, that gap is return on its own.
Earnings have proved durable
Profitable in every one of the last 4 reported years. Consistency lowers the risk that any single bad year is structural rather than cyclical.

🔴 Bear CaseWhat could go wrong?

Leverage amplifies any setback
Debt/Equity of 4.96x. Interest is payable whether or not the business has a good year.
Sales are being booked faster than collected
Receivables are up 63% against revenue up 36%. If customers keep taking longer to pay, reported profit will not turn into cash — and write-offs follow if some never do.
A premium to the sector to defend
It trades 57% above the peer median. That premium needs a reason that persists, or it closes.
Size brings its own risk
Small Cap businesses are thinly traded, so exits are harder in a falling market and single events move the price more than they would for a larger company.
Several serious flags at once
2 high-severity checks triggered. Individually each has an explanation; together they raise the chance that something structural is wrong rather than a one-off.

🟡 Key Things to WatchMeasurable tripwires, set against where this company stands today

1Revenue growth stays above 8% a year✓ 10.8% CAGR
Latest reported year was 20.4%. The bar is set below the established compounding rate, so ordinary variation does not trip it.
2EBITDA margin holds above 22%✓ 23.9%
Two points below today's level — enough room for noise, tight enough to catch real compression.
3Free cash flow remains positive✓ ₹291 Cr
Profit that never becomes cash eventually stops being profit.
4Debt / EBITDA stays below 2x✓ 0.2x
The ratio lenders write covenants against; it survives a small or negative equity base, unlike Debt/Equity.
5ROCE stays above 11%✓ 13.7%
Falling returns on capital are usually competition arriving, and show up here before they reach the margin.

Investment Checklist

8 / 12 checks passed

✗ Strong return on equity (ROE ≥ 15%)
✗ Strong return on capital employed (ROCE ≥ 15%)
✓ Healthy net margin (≥ 10%)
✓ Generates positive free cash flow
✗ Manageable leverage (Debt/Equity < 1.0)
✓ Adequate short-term liquidity (Current Ratio ≥ 1.0)
✓ Revenue growing year-over-year
✓ Profit growing year-over-year
✓ Not trading at an extreme valuation (P/E < 40x)
✓ Not buying right at the 52-week high
✓ Analyst consensus isn't majority-sell
✗ Short-term technical trend isn't bearish

Price history

Quick Metrics

3 good · 7 neutral · 1 weak

Market Cap

₹9,088 Cr

Small Cap

Smaller company — thin liquidity and deep drawdowns are normal here

P/E (Trailing)

26.0x

Fair

Fairly valued against the generic band

P/B Ratio

2.83x

Fair

Moderate premium to the company's book value

EPS (TTM)

₹24.86

Profitable

Profitable on a per-share basis

ROE

10.9%

Moderate

Moderate capital efficiency

ROCE

13.7%

Moderate

Moderate return on the capital in the business

Debt/Equity

4.96x

High

High leverage

Revenue Growth (YoY)

20.4%

Healthy

Healthy top-line growth

Profit Growth (YoY)

8.1%

Modest

Slow profit growth

Dividend Yield

0.62%

Modest

Small cash return — most of the return has to come from the price

Free Cash Flow

₹291 Cr

Cash generative

Generates cash even after funding its capex

More Metrics

P/E (Forward)

15.7x

Improving

Below the trailing multiple — the street expects earnings to grow into the price

Operating Margin

12.8%

Average

Average margins

Net Margin

11.1%

Good

Strong bottom-line conversion

Current Ratio

2.11

Comfortable

Healthy short-term liquidity

Beta (vs Nifty)

0.67

Defensive

Steadier than the market

52W Range Position

12%

Near low

Near its 52-week low

Technical Snapshot

SMA 20 / SMA 50

621.2 / 662.0

Bearish alignment (short < long)

Price vs SMA 200

Below

Long-term downtrend

RSI (14)

54.0

Neutral momentum

Financial Trend (4-Year)

Metric	FY23	FY24	FY25	FY26	3Y CAGR
Revenue	₹2,231 Cr	₹2,506 Cr	₹2,500 Cr	₹3,038 Cr	+10.8%
EBITDA	₹520 Cr	₹616 Cr	₹616 Cr	₹727 Cr	+11.8%
EBITDA Margin	23.3%	24.6%	24.6%	23.9%	—
PAT (Net Profit)	₹267 Cr	₹321 Cr	₹333 Cr	₹345 Cr	+8.9%
EPS	₹19.23	₹22.85	₹23.6	₹24.31	+8.1%
ROE	13.0%	13.2%	11.9%	10.9%	—
ROCE	17.6%	18.3%	15.3%	13.7%	—
Total Debt	₹27 Cr	₹44 Cr	₹72 Cr	₹159 Cr	+80.2%
Free Cash Flow	₹9 Cr	₹237 Cr	₹260 Cr	₹291 Cr	+224.6%

🟢 Revenue has grown at 10.8% a year over 3 years.

🟢 EBITDA has grown at 11.8% a year over 3 years.

🟡 EBITDA Margin has held roughly flat at 23.9% over 3 years.

🟢 PAT (Net Profit) has grown at 8.9% a year over 3 years.

🟢 EPS has grown at 8.1% a year over 3 years.

🔴 ROE has fallen from 13.0% to 10.9% over 3 years (-2.1 pts).

🔴 ROCE has fallen from 17.6% to 13.7% over 3 years (-3.9 pts).

🔴 Total Debt has grown at 80.2% a year over 3 years.

🟢 Free Cash Flow has grown at 224.6% a year over 3 years.

Balance Sheet & Cash Flow — FY2026

Total Assets

₹4,580 Cr

Total Liabilities

₹1,380 Cr

Cash & Equivalents

₹424 Cr

Operating Cash Flow

₹510 Cr

Capex

-₹220 Cr

Shareholding (proxy)

Institutional Holding

14.8%

Insider Holding

43.5%

Corporate Actions

Dividend Rate

₹4

Ex-Dividend Date

24 Jul 2026

Analyst Consensus

Recommendations

4 Buy · 0 Hold · 0 Sell

Target Price (Mean)

₹947

+46.4% vs CMP

Target Range

₹788 – ₹1,050

Peer Comparison

Company	P/E	ROE
TATA CONSULTANCY SERV LT	17.3x	45.6%
INFOSYS LIMITED	15.8x	32.0%
HCL TECHNOLOGIES LTD	20.4x	24.6%
WIPRO LTD	14.5x	15.9%

Recent News

3 mixed3 general

INTELLECT Outlook for the Week

Equitypandit, 09 Oct

Intellect Design Arena (NSEI:INTELLECT) Stock Forecast & Analyst Predictions

Simply Wall Street, 05 OctAnalyst view

🟡Mixed / dependsBroker commentary — an opinion about the price rather than new information about the business.

Intellect Design Arena Share Price rises 5.19% to Rs 639

Univest, 14 OctPrice move

🟡Mixed / dependsA price move, which is not by itself a change in the business. Worth finding the cause before reading it as either good or bad.

Franklin Templeton sells 124,710 Intellect Design shares

scanx.trade, 15 Oct

Intellect Design Arena Falls 1.58% Despite Canada Deal Win

HDFC Sky, 19 Mar

INTELLECT Forecast — Price Target — Prediction for 2027

TradingView, 25 JunAnalyst view

🟡Mixed / dependsBroker commentary — an opinion about the price rather than new information about the business.

Watch Items

Cross-check against the company's latest quarterly filing / investor presentation before acting.

DalalBaazaar Thesis

StrongGrowth · Profitability

MiddlingBusiness Quality · Financial Health · Valuation · Risk

Points for each in the Score ↑

Unremarkable in both directions

A reasonable business at a reasonable price. Nothing here is alarming and nothing is compelling, which usually means the decision rests on things this data cannot see — the industry's direction, management's intent, and what else is available to you. 2 high-severity red flags sit above this conclusion and should be read first.

All 5 tripwires holding · see Key things to watch ↑