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Business News/ Markets / Stock Markets/  Q4 Results Reaction: Intellect Design Arena shares tank 15.5% on weak Q4
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Q4 Results Reaction: Intellect Design Arena shares tank 15.5% on weak Q4

Intellect Design Arena's shares fell 15.5% in intraday trading after weak Q4FY24 earnings, with net profit declining 6.6% YoY. Revenue dropped 1.4% due to the termination of the GeM contract. Despite recent losses, the stock has delivered 124% returns in the last year, outperforming Nifty50.

Intellect Design Arena's shares fell 15.5% in intra-day trading after weak Q4FY24 earnings, with net profit declining 6.6% YoY. Revenue dropped 1.4% due to termination of GeM contract. Despite recent losses, stock has delivered 124% returns in last year, outperforming Nifty 50. (Pixabay)Premium
Intellect Design Arena's shares fell 15.5% in intra-day trading after weak Q4FY24 earnings, with net profit declining 6.6% YoY. Revenue dropped 1.4% due to termination of GeM contract. Despite recent losses, stock has delivered 124% returns in last year, outperforming Nifty 50. (Pixabay)

Shares of Intellect Design Arena cracked 15.5 percent in intra-day deals on Friday after the company reported weak earnings for the quarter ended March 2024 (Q4FY24).

The Chennai-based fintech company reported a 6.6 percent year-on-year (YoY) decline in its net profit at 85 crore in Q4FY24 as against 91 crore in the corresponding quarter last year. The firm informed that its net profit was without considering the one-off exceptional item of MAT credit write-off of 12.51 crore.

Read here: SBI shares extend gains as analysts remain bullish after upbeat Q4 results

Meanwhile, its total revenue for the quarter under review fell 1.4 percent YoY to 612 crore on the back of the termination of the Government e-Marketplace (GeM) contract. On the operating front, its Earnings before interest, taxes, depreciation, and amortisation (EBITDA) margins were flat at 22.2 percent YoY (and up 130 bps QoQ), the muted margin was due to 15 percent YoY increase in employee expenses.

The stock shed as much as 15.5 percent to its day's low of 864.35. It is now 28 percent away from its peak of 1,198.80, hit on March 15, 2024. However, it has still soared 89 percent from its 52-week low of 457.60, hit on May 11, 2023.

Read here: BPCL, HPCL shares jump up to 5% post-Q4 earnings, should you buy, sell, or hold?

In the last one year, the stock has delivered multibagger returns of 124 percent, outperforming benchmark Nifty 50 which has risen 20 percent during this period. However, it is up just 3.6 percent in 2024 YTD. The stock has lost 17.5 percent in May so far, extending losses for the third straight month. However, it rose 23 percent in February and 7.6 percent in January this year.

Among other details, the company’s board has also recommended a final dividend of 3.50 per share of the face value of 5 for the financial year ended March 31, 2024.

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.

Read here: Piramal Enterprises Q4 results : profit at 137.09Cr, Revenue increased by 1.36% YoY

The company's revenues and margins were affected by the termination of the GeM contract, but this decision should improve future margins as the contract was not favourable for the company's profitability, according to ICICI Securities. The company also had a strong deal pipeline for the end of FY24, with 18 digital transformation deals in Q4FY24. The brokerage firm reported the company projected a 15% revenue growth for FY25, adjusted for the GeM exit.

The company further informed that its eMACH.ai technology suite drove growth with 16 new customers, while 18 global financial institutions adopted its platforms and products in Q4. In total, 52 new customers selected Intellect's digital offerings, including 16 major contracts, and 54 global financial institutions are now using the company's platforms and products.

Read here: Westlife Development Q4 Results Live : profit falls by 96.2% YOY

"We have extended the utilisation of eMACH.ai to include large Corporations and Governments through three new platforms launched in FY24: Intellect Corporate Procurement Exchange (iCPX), Intellect Government Procurement (iGPX) and Intellect Account Payable Exchange (iAPX)," the company informed.

 

 

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Published: 10 May 2024, 11:25 AM IST
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