Reduce Polaris Financial Technology - Target Price Rs.120 - Kotak

Revenues decline, margins unsustainable. Polaris reported yoy decline in revenues and modest growth on qoq basis. EBITDA margins expanded 290 bps through aggressive cost control measures; however, the current margin level is unsustainable. Weak spending in BFSI, volatility in product revenues and challenges in sustenance of (ex-currency) margins keep us cautious on Polaris.

Cut FY2013-14E EPS estimates by 4-12%. REDUCE with a TP of Rs120/share (Rs130 earlier).

Source : Equity Bulls

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