Intrinsic Value NTT Data Intramart Corporation (3850.T)

• Previous Close: ¥3,650.00
• Intrinsic Value: ¥27,112.38
• Upside potential: +643%

Stock Valuation Context

Business Model And Market Position

NTT Data Intramart Corporation operates in the software infrastructure sector, specializing in web-based system solutions through its flagship product, intra-mart. The company serves both domestic and international markets, offering a blend of packaged software and consultation services to streamline enterprise digital transformation. As part of the broader NTT Data ecosystem, it leverages its parent company’s resources while maintaining a niche focus on scalable, customizable web system frameworks. The firm’s market position is reinforced by its integration capabilities and long-standing client relationships in Japan, though it faces competition from global SaaS providers and low-code platforms. Its revenue model combines software licensing, maintenance fees, and professional services, ensuring recurring income streams alongside project-based engagements. The company’s expertise in enterprise web systems positions it as a trusted partner for mid-to-large corporations seeking tailored digital infrastructure solutions.

Revenue Profitability And Efficiency

In FY2024, NTT Data Intramart reported revenue of ¥9.26 billion, with net income of ¥350 million, reflecting a net margin of approximately 3.8%. Operating cash flow stood at ¥876.6 million, though capital expenditures of ¥-1.12 billion indicate ongoing investments in product development or infrastructure. The modest profitability suggests competitive pressures or high operational costs inherent in the software consulting space.

Earnings Power And Capital Efficiency

The company’s diluted EPS of ¥72.18 underscores its ability to generate earnings despite thin margins. With minimal total debt of ¥45.4 million and a cash reserve of ¥2.54 billion, it maintains a strong liquidity position. The low beta of 0.394 indicates relative stability, though reliance on project-based revenue may introduce variability in earnings power.

Balance Sheet And Financial Health

NTT Data Intramart’s balance sheet is robust, with cash and equivalents covering its negligible debt multiple times over. The absence of significant leverage provides flexibility for strategic initiatives or R&D investments. However, the negative free cash flow (after accounting for capex) warrants monitoring to ensure sustainable growth without eroding liquidity.

Growth Trends And Dividend Policy

Growth appears tempered, with revenue and net income figures suggesting a mature market position. The dividend payout of ¥35 per share implies a yield of approximately 1.5% (assuming current market cap), aligning with conservative capital return policies typical of Japanese tech firms. Future growth may hinge on international expansion or product innovation.

Valuation And Market Expectations

At a market cap of ¥16.93 billion, the company trades at a P/E ratio of around 48, indicating high earnings expectations relative to current profitability. Investors likely price in potential synergies from its NTT Data affiliation or niche software demand, though valuation multiples should be weighed against sector benchmarks.

Strategic Advantages And Outlook

NTT Data Intramart’s integration with NTT Data provides a competitive edge in cross-selling and scalability. Its focus on enterprise web systems aligns with digital transformation trends, but success will depend on differentiating from cloud-native rivals. The outlook remains cautiously optimistic, contingent on balancing R&D investments with margin improvement.

Sources

Company filings, market data