Intellect Design Arena Ltd.'s poor earnings in the fourth quarter of financial year 2024 disappointed the Street as revenue and profit declined.
The open finance platform's Cloud/SaaS business declined 50% sequentially. Its consolidated net profit declined 6% sequentially, excluding the minimum-alternate-tax credit write-off.
Intellect Q4 FY24 Earnings Highlights (Consolidated, QoQ)
Revenue down 1.3% to Rs 612 crore versus Rs 620 crore
Ebitda down 4.2% to Rs 137 crore versus Rs 143 crore.
Margin narrows 67 basis points to 22.4% versus 23.1%.
Net profit down 6% to Rs 86 crore versus Rs 91 crore.
Key Levels To Watch
Resistance level: Rs 1,073 (Two-day high)
Support level: Rs 830 (200-day moving average)
The stock plunged as much as 15.6% during the day to Rs 864 apiece on the NSE. It was trading 13.15% lower at Rs 890 per share, compared to a 0.6% advance in the benchmark Nifty at 10:45 p.m.
The share price has risen 94% in the last 12 months and 7.47% on a year-date basis.
Key Highlights
The management guided for a 15% revenue growth in the current fiscal after adjusting for the dissolution of Government eMarketplace business. It highlighted challenges in Indian banks as outdated tech has led to security risks and inefficiencies. The deal pipeline stands strong at Rs 81.4 billion, up 16% year-on-year.
The management is very positive on the traction in the deal pipeline with increasing opportunities. However, quantifying these continues to be a challenge.
Mixed Street Views
Dolat Capital: It maintains 'accumulate' rating on the stock with a target price of Rs 1,110 apiece. It pointed out that the company is experiencing significant deal wins, coupled with a robust pipeline that enhances visibility. The near-term growth headwinds will be mitigated by margin expansion.
Avendus Spark: It has a 'sell' rating on the stock with a target price of Rs 830 apiece.
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