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Street punishes Intellect Design for not delivering on margin guidance after losing multi million dollar deal

Street punishes Intellect Design for not delivering on margin guidance after losing multi-million-dollar deal

Street punishes Intellect Design for not delivering on margin guidance after losing multi-million-dollar deal
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By Dipikka Ghosh  May 10, 2022 7:21:16 PM IST (Updated)

The shares of Intellect Design Arena, on Friday, fell as much as 7.63 percent in early trade on the back of the company posting its numbers for the fourth quarter ended March 31, 2022. At 10:33 am, the shares of the company were trading at Rs 710 apiece on the BSE, having pared some of its losses, down 0.69 percent or Rs 4.95.

The shares of Intellect Design Arena, on Friday, fell as much as 7.63 percent in early trade after the company posted its numbers for the fourth quarter ended March 31, 2022.

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The stock opened with a loss of 5.59 percent and has been falling consecutively for the last 6 days. The stock is also trading lower than its 5-day, 20-day, 100-day and 200-day moving averages.
The Chennai-based fintech company reported a 25.1 percent increase in its net profit to Rs 100.8 crore for the March quarter. Its revenue increased by  7 percent on a quarter-on-quarter (QoQ) basis to Rs 522.6 crore during the quarter under review.
In an interview with CNBC-TV18, Arun Jain, Chairman & MD, Intellect Design Arena, explained that the company lost a deal to the tune of USD 4 million, which led to it not being able to deliver on the EBITDA margin guidance.
"Guidance of 30 percent, we had lost one deal, a Russia-Ukraine deal of $4 million. If $4 million deal could have been in the top line, bottom line, it would have been more than 30 percent EBITDA margin," he said.
He added, "$4 million would have given 30 crore additional revenue and 30 crore additional bottom line because that flows directly to the bottom line. So that one deal, which is in Germany, we lost just on the day of the war being initiated. So, I think those kinds of fluctuations can drive the change. Still, we are hopeful that we will be reaching 30 percent EBITDA margin, not in a specific quarter, but during some part of the year."
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