Intellect Design Arena stock tanks 16% on heavy volume post Q4 results

Intellect Design Arena stock update: The company has indicated a revenue growth of 15 per cent for FY25, adjusted for GeM exit.

Shares of Intellect Design Arena tanked 16 per cent to Rs 864.35 on the BSE in Friday’s intra-day trade on profit booking after the company reported disappointing earnings for the March quarter (Q4FY24), with reported revenue of Rs 612 crore, down 3.6 per cent quarter-on-quarter (QoQ) and down 1.4 per cent  year-on-year (YoY). Revenue was hit due to termination of GeM contract.

Reported profit after tax (PAT) declined 5.7 per cent YoY at Rs 85.48 crore. Earnings before interest, taxes, depreciation, and amortization (EBITDA) margins were flat at 22.2 per cent YoY (and up 130 bps QoQ), muted margin was due to 15 per cent YoY increase in employee expenses.

Intellect Design Arena has the world’s largest cloud-native, API-led microservices-based multi-product platform for Global leaders in Banking, Insurance, and Capital Markets.

As indicated earlier by the company in Q3, revenues and margins were hit by the GeM contract termination. However, it shall aid to improve margins in the future as it was a margin detrimental contract for the company, ICICI Securities said in a note.

Moreover, the company had a healthy exit deal pipeline for FY24 including 18 digital transformation deals in Q4FY24. The company has indicated for a revenue growth of 15 per cent for FY25, adjusted for GeM exit, the brokerage firm said.

Meanwhile, in past one year, Intellect has outperformed the market by zooming 95 per cent, as compared to 18 per cent rise in the S&P BSE Sensex. The stock had hit a 52-week high of Rs 1,198.80 on March 15, 2024.

At 10:13 am; Intellect was trading 12 per cent lower at Rs 896.85, as against 0.69 per cent rally in the benchmark index. The trading volumes on the counter jumped over four-fold. A combined 2.2 million equity shares changed hands on the NSE and BSE.