Stock Analysis & Valuation NTT Data Intramart Corporation (3850.T)

• Previous Close: ¥3,650.00
• Sector Valuation Confidence Level: Low

Valuation method	Value, ¥	Upside, %
Artificial intelligence (AI)	3226.01	-12
Intrinsic value (DCF)	27112.38	643
Graham-Dodd Method	831.37	-77
Graham Formula	2437.02	-33

Strategic Investment Analysis

Company Overview

NTT Data Intramart Corporation (3850.T) is a Tokyo-based software infrastructure company specializing in web system solutions. A subsidiary of NTT Data, it offers intra-mart, a flagship package software for enterprise web system development, alongside consulting services. Operating primarily in Japan with international reach, the company serves businesses seeking scalable digital transformation tools. With a market cap of ¥16.9 billion (as of latest data), NTT Data Intramart leverages its parent company’s telecom and IT ecosystem to deliver integrated solutions. The firm’s focus on low-code/no-code platforms positions it in the growing enterprise automation sector, competing in Japan’s ¥4.3 trillion IT services market. Its asset-light model and recurring revenue from software licenses and maintenance provide stability, though growth depends on adoption of its niche intra-mart platform against broader competitors.

Investment Summary

NTT Data Intramart presents a mixed investment profile. Strengths include its affiliation with NTT Data (a global IT services leader), debt-light balance sheet (¥4.5 billion debt vs. ¥2.5 billion cash), and consistent dividends (¥35/share yield). The stock’s low beta (0.39) suggests defensive characteristics. However, muted growth is evident—revenue of ¥9.3 billion and net income of ¥350 million reflect thin 3.8% net margins. Negative free cash flow (¥240 million after CapEx) raises concerns about reinvestment needs. Valuation appears reasonable at ~1.8x revenue, but EPS growth must accelerate to justify multiples. Key risks include dependence on intra-mart’s niche appeal and competition from larger SaaS providers. Suitable for investors seeking stable, dividend-paying tech exposure with moderate growth potential.

Competitive Analysis

NTT Data Intramart’s competitive position hinges on its specialized intra-mart platform, which targets Japanese enterprises needing customizable web systems. Its primary advantage is integration with NTT Data’s extensive client network (90% of Japan’s Fortune 500 companies use NTT services), providing cross-selling opportunities. The platform’s low-code functionality differentiates it from generic SaaS tools, appealing to non-technical users. However, its Japan-centric focus (likely >80% of revenue) limits global scalability compared to cloud-native rivals. The company lacks the R&D scale of multinational peers—its ¥350 million net income pales next to competitors spending billions on AI/cloud capabilities. While intra-mart’s on-premise legacy solutions retain sticky clients, migration to cloud-based alternatives poses a long-term threat. Its consulting services add stickiness but face pricing pressure from Indian IT firms. The firm’s true moat is its NTT affiliation, though this also creates client concentration risks.

Major Competitors

• OBIC Co., Ltd. (4684.T): OBIC provides competing enterprise software (e.g., OBIC7) with stronger financials (¥48 billion revenue) and higher margins (~20% net). Its focus on ERP systems makes it less direct but overlaps in mid-market Japan clients. Lacks NTT Data Intramart’s low-code specialization but has superior cash flow generation.
• SCSK Corporation (9719.T): SCSK offers broader IT services including competing web solutions. Larger scale (¥400 billion revenue) and Mitsubishi Group backing give it an edge in enterprise deals. However, its diversified model lacks NTT Data Intramart’s platform focus, and bureaucracy slows innovation.
• GMO Internet, Inc. (3903.T): GMO’s cloud and payment services compete indirectly. Its strength in SMEs and digital marketing contrasts with NTT Data Intramart’s corporate focus. More volatile but higher-growth (15% YoY revenue growth vs. NTT Data Intramart’s single digits). Lacks a comparable low-code platform.
• mixi, Inc. (2121.T): Known for social apps, mixi has pivoted to enterprise SaaS (e.g., ‘TeamSpirit’ HR software). Its mobile-first approach competes for digital transformation budgets. Smaller scale but more agile development. NTT Data Intramart’s consulting depth is a counter.
• NTT Limited (NTTYY): Parent company NTT’s global IT services overlap in consulting. While not a direct competitor, internal resource allocation risks exist. NTT’s broader cloud offerings (e.g., NTT SmartConnect) could marginalize intra-mart over time.