Q1-Fy25 Con call Notes

• Moving towards 700 cr per quarter revenue from 600 cr per quarter
• Costs are more or less fixed around 480 cr per quarter. Any additional revenue (around 80%) will translate to margin
• Canada Credit Unit (Vancity) won – significant win. The Canadian credit union market which is run on 30/40 year old systems. Vancity is leader in Credit Union market and this deal win has opened a few other opportunities in the market for Intellect.
• US-Hired senior person and started marketing. US is highly regulated market but large TAM. It is a long shot. This could be investment area in the future.
• Conducted few events in last few months in Europe/London/Chennai. Getting 2 leads a day since last few months. Best momentum they have ever seen. Until last year they used to get 60 leads per quarter but this quarter they got around 120 leads. This is due to increased awareness as well as from newly signed partner network. 600cr of funnel through partner network.
• Purple Fabric and iTurmeric is a disruptive technology with huge runway in the market.
• Revenue may be lower margin due to required investment and subscription elements associated with these kinds of products
• IntellectAI – Signed up big 5 – PwC, Accenture, EY, KPMG and Deloitte.
• Talking to lot of CEOs/Heads for partnership. They should be able to build business of $10-$30 million on partnership with IntllectAI products, at least they should see a path towards it by implementing products. Next 2/3 quarters Intellect should have better understanding of how the partnership work is evolving.
• If partnership network starts delivering (as Intellect expect), they could reach 30% margin next 6/8 quarters. Current margins are lower at 20-22% due to investment required in supporting products and new technologies
• eMach AI – Huge interest in wealth management across countries. Implementing for Commodity exchanges in Bangladesh.
• Reduction in implementation revenue – Due to low code nature. Also as they increase partners, implementation revenue will be less. Focus is on license and SaaS revenue.
• Aim for 20% growth over 3-5 years with full focus on organic growth. No interest in inorganic growth.

My Take:
I think they are seeing lot of traction. This does not mean that it will fructify, but they are putting themselves in the right spot at the right time. Earlier many IT companies would believe that they can develop project/product if they implement similar thing for few clients. But Intellect has developed over 30 years of domain expertise with Arun Jain spearheading the operation with full focus on organic expansion.

Intellect was a bit slow on cloud and subscription business but it looks like they spotted AI trend nicely and are riding it. Hopefully it shall result in more client signings and entry in more developed markets.

Absolutely! When Prof. Damodaran valued Zomato at ₹41 during its IPO in 2021, he looked at the information available back then. he didn’t consider blinkit at that time as Zomato acquired Blinkit only in June 2022.

There are so many things we miss when valuing a company. it is nearly impossible for anyone to predict it correctly

Thanks a lot! @rajeesh_jegadeesan for your comment. Hope we learn things and grow together.