The Hindu Business Line : Strong rupee weighs on Polaris net profit

Chennai, April 23 Despite a slowdown in the banking and financial services markets in the US, Polaris Software Labs has posted 19 per cent growth in dollar terms for the quarter ending March 2008, compared to the same quarter last year.

A strong rupee has, however, resulted in a marginal revenue growth of about 6 per cent in rupee terms and a less than one per cent growth in net profit.

Deals for the quarter were billed at Rs 39.83 a dollar, Rs 4.92 less than that the billing rate in the same quarter in the previous year.

Mr R. Srikanth, Executive Vice-President & Chief Financial Officer, Polaris, attributed the growth in the current quarter to the company’s focus on profitability as in dollar terms net profit had grown by 12 per cent. Polaris bagged 14 new deals in the quarter including a master services agreement with a Fortune 10 bank in North America. It also increased its utilisation rate by 200 basis points to 76.55 per cent on a q-o-q basis.

“Our revenues for the next year are hedged at an average rate of Rs 40.07 against the dollar,” he said.

Performance for the year ending March 2008 was relatively cheerful with the company missing the guidance by only three percentage points to grow at 22 per cent year-on-year. Net profit, however, was hit by the fluctuating currency. “Though revenues have grown y-o-y, profits have taken the brunt of currency fluctuations,” Mr Srikanth said.

Revenues from the sale of the Intellect range of banking products comprised 19.6 per cent of total revenues for the year ending March 2008 with 12 installations in areas like wealth management, credit cards and core banking solutions. “We have been able to maintain this in the 20 per cent range,” he said. The company plans to extend this range of products beyond US and UK is expanding its distribution network accordingly.

‘No cancellations’

When asked if there were any delays or cancellations by clients, Mr Srikanth said there were no cancellations but delays of a “few weeks.” “But we have been able to get better pricing for our offerings,” he said adding that every quarter they had got increased pricing from 2-3 clients. Polaris has given a guidance of 20 per cent CAGR for the current year.

The company’s board have recommended a final dividend of 30 per cent on the paid-up capital for fiscal 2008.The board considered a proposal of buy-back of its equity shares and had discussions on this subject. In the course of the discussions, members drew attention to the real estate investments made by the company and suggested that best options to maximise shareholder value from these investments be explored.

Accordingly the board decided to defer its decision on the buy-back of equity shares and appointed a committee to give recommendations to enable the board to take a decision at its next meeting.

More Stories on : Financial Performance | Software

Article E-Mail :: Comment :: Syndication :: Printer Friendly Page

Stories in this Section
Convergys wins BSNL order

New Blackberry connections may take some more time

Mobile scheme from IFFCO arm

DLF enters into pact with TIDCO for Chennai project

Strong rupee weighs on Polaris net profit

Educomp profits surge 145%

IBM/ Lenovo best brand: Survey

Accenture partners ISB for academy

TCS to add 30,000 seats this fiscal

Logica on restructuring mode

New guidelines on mergers likely to upset AT&T plans

Steps down from post