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.

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

Holy cow I’m in a very similar life position as yours but its just that my asset diversification and goals are a little different. Planning to follow your thread.

Planning to offload

Trent – Too small a position but I think its way too over valued, the thing is they are participating and competing in a market which is buzzed by million unbranded players, im quite sure though the indian consumption story is here to stay, I’m planning to divest

Gujarat Pipapav port – Highly manipulated stock, I bought it out of a SEBI registered investor advice but this is a collateral damage where I could not monitor the movements because of too many stocks in a portfolio

KNR construction – Government dependent business, promoters are decreasing their holdings and their Stocks Underperforming their Industry Price Change in the Quarter

Vodafone idea – No brainer. Just loss harvesting which will give me enough time to concentrate on other businesses

Silver ETF – I’m already investing on gold, owing to which im divesting and it has too little weightages

ITD Cementation – A fantastic company just offloading owing to too many picks in portfolio

L&T – Too big a company and its already covered in my ELSS MF portfolio

Infosys – Company is going through distress, the pipeline of projects are dry and would rather prefer to pick smaller IT companies or IT bees to leverage rupee losing value

Lemon tree hotels – Investing in IHCL and Samhi hotels in alternate

Aditya AMC – Unable to concentrate right now and not interested in their business to be more honest

Balmer Lawrie – I have spent good 10 months in this stock, even in the all time high, this stock is not going anywhere. Rather would invest in more convicted picks

Amara Raja, HDFC, ICICI, South indian bank – There are better Large cap players for all of these sectors whose growth is yet to begin

EPIGRAL – Meghmani finechem, has already given a good run up, and I am more convicted in taking a position in Natco rather

BEL – A new nifty 50 entrant but not in my circle of competence

Titan – Too little a position to even consider meaningful returns

This brings the list from 38 to 20