Street punishes Intellect Design for failing to provide margin advice after losing multi-billion dollar contract

Shares of Intellect Design Arena on Friday fell 7.63% in early trading after the company released its numbers for the fourth quarter ended March 31, 2022.

The stock opened with a loss of 5.59% and has fallen consecutively over the past 6 days. The stock is also trading below its 5-day, 20-day, 100-day and 200-day moving averages.

The Chennai-based fintech company reported a 25.1% increase in net profit to Rs 100.8 crore for the March quarter. Its revenue rose 7% on a quarterly basis (QoQ) to Rs 522.6 crore in the quarter under review.

In an interview with CNBC-TV18, Arun Jain, President and CEO of Intellect Design Arena, explained that the company lost a contract worth $4 million, which prevented it from meeting forecasts. EBITDA margin.

“With a 30% forecast, we had lost a deal, a $4 million Russia-Ukraine deal. If a $4 million deal could have been in revenue, the EBITDA margin would have been greater than 30%,” he said. mentioned.

He added: “$4 million would have given 30 crore extra revenue and 30 crore extra bottom line because it goes directly to the bottom line. So this deal, which is in Germany, we lost just the day of the outbreak of the war. So I think that kind of fluctuations can be the cause of the change. Nevertheless, we hope to achieve a 30% EBITDA margin, not in a specific quarter, but during part of the year.


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