The stock of Intellect Design Arena, a software products company focused on the BFSI segment, has rallied more than 12 per cent over the past one month. The stock has had a good run after the company reported a reasonable set of numbers in the June quarter. Revenues increased by over 24 per cent Y-o-Y in the first quarter of FY19 to ₹299 crore. From barely reporting any profits (₹0.74 crore) during the same period last year, Intellect recorded a bottom-line of ₹43.5 crore, helped by ₹38 crore other income from the sale of a property.
The company managed to win a ₹100-crore contract from an European bank and a few more large projects in the June period, indicating robust traction from its client base.
Intellect has indicated that it is on course to grow 20 per cent Y-o-Y in FY19, which would be among the highest in the industry. Given the run-up in the stock price, valuations are not inexpensive.