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Chennai (India), November 9, 2017:

Intellect Design Arena Ltd, a specialist in applying true Digital Technologies and a global leader in Financial Technology across Banking and Insurance, announced its second quarter results for FY 2017-18 today.

I. Executive Summary

Q2 FY 18 Financial Highlights:

Revenue

  • Intellect revenue grew 21% in dollar terms over last year same quarter. Revenues stood at $ 41.75 mn (in INR Rs. 268 Cr) as compared to $34.5 mn (in INR Rs. 231 cr) in the same quarter last year. INR Revenue registered 16% YoY growth.
  • Revenue (in dollar terms)for the H1 FY 18 was higher by 21% as against H1 FY 17
  • Revenue (in dollar terms) for the last trailing 9 months was 20% higher than the similar period in the last year

License and AMC

  • License and AMC revenue crossed 100 Cr mark and stood at Rs. 106 Cr in Q2 FY 18
  • Q2 FY 18 LTM License and AMC revenue (in dollar terms) grew by 30% as against the Q2 FY 17 LTM
  • H1 FY 18 License and AMC revenue (in dollar terms) went up by 26% as against H1 FY 17

Digital Transformational Deals

  • Intellect was awarded 12 deals including 3 large Digital transformational deals in Q2 FY18

Gross Margin

  • Gross Margin stood at Rs. 133.29 Cr in Q2 FY 18 as against Rs. 115.57 Cr in the same quarter last year.
  • Gross Margin sustained at 50%

EBITDA and Net Profit

  • The company registered positive EBITDA which stood at Rs. 21.82 Cr as against Rs. -9.89Cr (Negative) in the same quarter last year, showing a movement of Rs. 31.71 Cr in EBITDA.
  • Net Profit stood at Rs. 7.95 Cr as against the loss of Rs. 14.86 Cr in the same quarter last year

Collections and DSO

  • For three quarters in a row, Intellect recorded healthy collections. Collections for Q2FY 18 stood at Rs. 255.11 Cr
  • Days of Sales Outstanding (DSO) improved by 28 days and stood at 158 days in Q2 FY 18 as against 186 days in the same quarter last year. The Net DSO after taking customer advances into account stands at 124 days
II. Digital Transformation Deals

With our path-breaking Digital 360 approach, Intellect has been able to address all aspects of our customers' digital transformation requirements. Q2 FY 18 has recorded 12 rich engagements including 3 large digital transformational deals.

Three Large Digital Transformational Deals

  • Bangkok Bank, largest bank of Thailand with 17 million accounts including business and retail customers and a nationwide network of over 1,200 branches chose Intellect as their technology partner to implement a comprehensive cash management platform and corporate portal. This deal win against established global competition paved our entry into Thailand
  • Government eMarketplace, under the auspices of the Department of Commerce, Ministry of Commerce & Industry, Govt. of India (GoI) has awarded the most ambitious, comprehensive and innovative Government eMarketplace (GeM) – online eCommerce portal to a consortium led by Intellect Design Arena Limited, against global competition. The deal entails complete management of the Government’s Buyer Seller platform. The Government of India plans to procure all purchases for both Central and State Government departments on a single portal (GeM). As of now there are around 50,000 sellers & service providers and over 15000 buyers on this portal.
  • One of the top 5 private banks in India providing a wide range of financial products and services has chosen Intellect for the Digital transformation of Corporate Banking. It is a three year transformational deal. The implementation of CBX will create a unified digital platform through which the bank’s clients can access a full range of corporate banking products – from accounts services, payments and receivables, through to trade and treasury.

Some of the other significant deal wins

  • One of India’s most progressive and innovative banks has selected Intellect to implement its Digital Transaction Banking (DTB) platform from iGTB – powered by an integrated frontend omni-channel Corporate Banking eXchange (CBX) portal and augmenting the front end portal of their existing Trade Finance with iGTB’s CBX
  • A leading banking and financial services organisation in Middle East has signed a deal with Intellect for Digital Transformation of the Corporate Banking
  • A company of specialist insurance businesses with operations in Europe, the US, Asia, Middle East and Australia has chosen Intellect’s Risk Analyst, the only AI based risk discovery and assessment software for commercial insurance in the industry.
  • One of the leading providers of commercial insurance in the United States has chosen Intellect’s Xponent, an AI and Analytics based underwriting workstation developed to transform the way commercial lines are underwritten today.
  • The Third largest private-sector banks in India offering a comprehensive suite of financial products has chosen Intellect’ SME Digital Portal to service over 30,000 of its existing SME customers
  • One of the leading PSU banks in India has chosen Intellect Cards as their PaaS partner for their green field Credit Card Business for a seamless management of Credit Cards handled by the bank. The Intellect product provides flexibility at a lower operating cost which makes it an ideal platform for card services.
  • The third largest bank by assets in the United Arab Emirates has chosen Intellect’s Digital Collect
  • A leading group of companies in Peru providing financial services, asset management and capital markets has chosen Intellect’s OneMARKETS for its Custody Solution.
  • An Indian multinational banking and financial services company has chosen Intellect OneTREASURY for its Treasury Mid Office operations.
III. Reliable Implementations

Life Insurance Corporation (LIC), one of the world’s largest insurers went live with a new portal that allows its customers to buy policies, pay premium and make modifications to their existing policies online. The move is set to benefit LIC’s twenty-nine crore policy-holders.

Intellect successfully implemented its complete end-to-end Digital Core Banking solution at Utkarsh Small Finance Bank Ltd, India. Utkarsh is a premier micro-finance institution in India and received its license for setting up a Small Finance Bank last year.

Intellect went live in 16 financial institutions across the world during this quarter. The significant implementations in Q2 FY 18 include:

  • Phase 2 of the Global Payment Orchestration from iGTB is live in one of the largest Canadian banks.The implementation of phase 2 of the bank's next generation payments infrastructure for business clients will drive growth by leading with innovation while helping to simplify how clients manage their business.
  • One of the leading banks in India has gone live with Trade finance from iGTB for their corporate customers. It has also implemented Treasury and Retail Remittance solution from Intellect.
  • One of the leading financial services organisation in Malaysia, with a heritage of more than 100 years and a largest lender bank in Indonesia have gone live with Digital Transaction banking platform suite to lead in Corporate Banking.
  • A leading financial institution in India has gone live with Intellect’s Supply Chain Finance solutions from iGTB to automate the best financing programs for various stakeholders, thereby achieving operational efficiency
  • Intellect Digital Core went live in one of the largest lender banks in Japan and one of the leading commercial banks in Uganda which makes Digital Core operational in 55 sites.
  • One of the PSU Banks and a leading private sector bank in India and a well known financial institution from Bhutan have gone live with Intellect Lending Suite. With this Intellect Lending is successfully running in 68 sites.
  • One of the leading multi-national banks in America and a leading financial institution in India has gone live with Intellect OneTreasury. This makes Intellect OneTreasury running in over 50 banks including Reserve Bank of India, NABARD, Saigon Hanoi Bank, National Bank of Ethiopia, UCO Bank and Housing Finance Bank.
  • Intellect’s OneMarkets has gone live in a leading independent investment company in Turkey. It has also gone live in one of the largest private sector banks in India for Custody Solutions from OneMarkets.
IV. Digital is the Key – New Products on the block

DIGITAL. CONTEXTUAL. REAL TIME

Intellect strongly differentiates itself in the global market place with Digital 360, Real Time and Contextual Banking, to accelerate digital transformation programs for financial institutions. Designed at FinTech 8012, the World's first Design Center dedicated to financial technologies, Intellect's Digital Product Powerhouse unlocks value to fuel transformation with a true digital edge.

IDC 17.1, Digital 360, Real time & Contextual Core Banking solution

Intellect launched its complete end-to-end Digital Core Banking solution, IDC 17.1. The Product has been specially designed for Truly Digital banking and carries unique differentiators including the deployment of BOTS, Artificial Intelligence & Machine Learning. IDC 17.1 is powered by a Real time GL that enables critical decisions in real time, whether it is payments or risk management. It also comes with an end-to-end integrated digital lending platform that includes Origination, Loan Management, Collections and Collateral Management System.

iGTB launched the era of ‘contextual’ banking with the release of New Corporate Banking platform CBX 18.

Standing for ‘Contextual Banking eXperience’, the platform not only provides seamless digital execution across the full range of transaction banking actions, but–uniquely–offers instant and intelligent recommendations as to the best actions available to banking clients.

CBX 18 moves transaction banking into the territory of customer-service champions such as Amazon and Netflix – using information on the client and its context to understand and anticipate their needs. An intelligent algorithm then calculates the optimal action based on their specific situation and preferences. iGTB calls this approach ‘contextual banking’. CBX 18 has currently been adopted by a number of innovative banks, with Global, European & Asian operations.

V. Acclaimed by Experts

Intellect’s cutting-edge digital technologies and digital products have been recognized by renowned global analysts and research firms.

Some of the significant recognitions by renowned global analysts and research firms are:

  • Intellect Payments Transformation at CIBC ranked "Winner - Payments“ at 2017 IDC Real Results Awards
  • IDFC Bank won IDC "Digital Transformation Leader" Award for Omni-Experience Innovation category powered by Intellect iGTB Transaction Banking Suite at IDC Digital Summit 2017
  • Intellect Design Arena has been listed as one amongst the Global Fintech Community setting direction for the industry and to have made real progress on API in Aite report
  • Intellect Design Arena emerged as a "Strong Performer" in Forrester's report, "Forrester Wave: Digital Banking Engagement Platforms 2017”
  • Intellect Design Arena recognized as a Challenger in Gartner’s Magic Quadrant for Global Retail Core Banking
  • Intellect iRTM enters Chartis RiskTech Quadrant for Enterprise Stress Testing
  • Intellect SEEC has earned the prestigious 2017 SMA Innovation in Action Award for Implementation for its product Intellect Risk Analyst.
  • Intellect SEEC has earned the prestigious Gold status in the Golden Bridge Awards® for its product Intellect Risk Analyst and Pranav Pasricha, CEO of Intellect SEEC was named a bronze winner for ‘Executive of the Year’ in the IT Software category
VI. Vital Parameters - Healthy

The current funnel (Active Pursuits) of Intellect is around $433 mn, out of which $396 mn is accounted by 213 opportunities.

We have over 28 high value active pursuits:

  • 6 pursuits are of value more than Rs. 50 Cr. each
  • 10 pursuits are of value between Rs. 30 Cr-Rs. 50 Cr. each
  • 12 pursuits are of value between Rs. 20 Cr - Rs. 30 Cr. each
VII. Management Statement

Arun Jain, Chairman and Managing Director, Intellect Design Arena Limited said, “Winning three large digital transformational deals in a single quarter is a very satisfying moment for me. Each transformational deal required very detailed planning – bringing in the right leaders, right competent team members and customer references to assure to create a winning proposition. I must celebrate the maturity of our leadership team who made these deal wins possible which will create pathways for more such wins in the coming quarters.”

S Swaminathan, Chief Financial Officer, Intellect Design Arena Limited said, “Intellect over the last 3 quarters have been able to demonstrate consistent growth of revenues coming from its rich portfolio of FinTech products, moving to a total of 116 million dollar revenue representing 20% growth over the same period last year. During this period, Intellect has also brought stability of remaining EBITDA positive and healthy collections through efficiency in Cost and Cash Management.”

Financial Results for the Second Quarter Ended September 30, 2017
 

Additional Information on function wise classification of statement of Profit and Loss of the Group (Consolidated Unaudited / Not Reviewed)

Rs. In Lakhs

Particulars

QUARTER ENDED

YEAR ENDED

September 30,2017(Q2 FY 18)

June 30,2017(Q1FY18

September 30,2016(Q2 FY17)

March 31,2017(FY17)

INCOME

Revenue from Operations

26,847.46

24,116.80

23,096.42

91,357.50

EXPENDITURE

Software development expenses

13,518.24

12,255.40

11,539.28

46,326.00

Gross Margin

13,329.22

11,861.40

11,557.14

45,031.50

Gross Margin %

49.65%

49.18%

50.04%

49.29%

Selling & marketing and General & Administrative expenses

9,037.14

8,627.22

10,432.68

39,102.94

Research & Engineering expenses

1,915.47

1,424.27

1,987.05

7,192.08

Provision for Debts and Write offs

195.00

195.00

126.00

1,233.16

Total Expenditure

24,665.85

22,501.89

24,085.01

93,854.18

EBITDA

2,181.61

1,614.91

(988.59)

(2,496.68)

Depreciation/Amortisation

592.96

588.80

610.24

2,413.99

Finance Charges

394.03

418.39

240.67

1,130.24

Profits / (Loss) before other income / minority interest

1,194.62

607.72

(1,839.50)

(6,040.91)

Other Income including exceptional items

330.98

298.64

265.95

3,429.72

Minority Interest / Share of profit / (loss) of Associate Companies

(546.46)

(469.32)

357.20

656.24

Profit / (Loss) before tax

979.14

437.04

(1,216.35)

(1,954.95)

Provision for taxation

183.84

363.24

270.00

283.63

Profit / (Loss) after tax

795.30

73.80

(1,486.35)

(2,238.58)

 

About Intellect Design Arena Limited

Intellect Design Arena Ltd, a digital technology product solutions provider to the Banking, financial services and Insurance industry, across Global Consumer Banking (iGCB), Central Banking, Global Transaction Banking (iGTB), Risk, Treasury & Markets (iRTM) and Insurance (Intellect SEEC). Intellect has created digital products & solutions for Banking and Insurance. FinTech 8012, a design centre for financial technology, reflects Intellect’s commitment to continuous and impactful innovation, addressing the growing need for digital transformation. With over 200 implementations, the company’s performance is driven by over 4,000 Intellect solution architects, functional and technology experts, with a presence in global financial hubs around the world and supported by design centres in multiple geographies. Please visit http://www.intellectdesign.com

For Media related info, please contact:
Nachu Nagappan
Intellect Design Arena Ltd
Phone: +91 89396 19676
Email: nachu.nagappan@intellectdesign.com

For Investor related info, please contact:
Praveen Malik
Intellect Design Arena Ltd
Phone: +91 89397 82837
Email: praveen.malik@polarisFT.com


 
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