Solid earnings lead Indian fintech companies higher

Solid earnings lead Indian fintech companies higher

Financial Technologies India and Firstsource Solutions saw significant share price rises last week on the back of positive quarterly earnings news, but the Finextra50 Financial Technology Index was flat, falling just .15 per cent to 54.81. Linedata Services led the fallers on a revised FY08 outlook.

India's Financial Technologies led the gainers last week, rising 30.96% by Friday to Rs681. The provider of technology for equity, foreign exchange, commodities and bond markets released quarterly results, which saw revenue for the quarter ended 30 September 286% higher at Rs1,195 million. Net profit rose 220% to Rs770 million year-on-year when excluding the project divestment revenue it received in the quarter a year ago.

In mid October the firm acquired a significant equity stake in UK-based Audit Control & Expertise Global Limited (ACE) Group, a global credit support organisation providing collateral control, field audits, inspection, monitoring and financial structuring services in the commodity trade and finance sector. Financial Technologies also launched the National Spot Exchange in mid October, a commodities exchange it is jointly promoting with the National Agricultural Co-operative Marketing Federation of India (NAFED).

But the company is still trading around 60% lower than it's 52-week high of Rs 2,689.90.

Also in India, business process outsourcing (BPO) service provider Firstsource Solutions saw its stock rise 15.77% to Rs17.25 by close of trading Friday, again on strong Q2 figures. Net profit rose 74.46% to Rs 269.70 million from Rs 154.59 million in the same quarter, previous year, while net sales for the quarter rose 14.94% to Rs 1,383.24 million.

Other companies to see significant rises include:

  • The Innovation Group, up 22.48% to 6.43p
  • Actuate, up 15.14% to $3.27
  • Patsystems, up 15.09% to 15.25p

Losers

Linedata Services led the fallers last week, with a drop of 12.75% to EUR6.98. The fall was triggered by a sales update, in which the company revised its FY 2008 outlook downward. It said that the acceleration of the financial crisis since the end of September has led to more postponement and cancellation of perpetual license agreements than anticipated. Meanwhile, additional costs and R&D investments are necessary in the context of the implementation of some projects.

As a result, the group now says that turnover will be similar to that of 2007 and with an annual EBITDA marginal rate close to the 15.1% it published for the first half of 2008.

Pegasystems fell 10.63% to $11.69. Even though it delivered record earnings for Q3 (up 25%) and earnings per share were in line with analyst estimates, its net profit of $2.4 million, was down compared to $3.5 million for the third quarter of 2007.

Other fallers include:

Index comparison



Methodology
More information on the Finextra50 Financial Technology Index methodology and constituent stocks can be found here.

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