Polaris crosses the double milestones of 1000 Cr annual revenues and 100 Cr annual profits

Chennai, 27 April 2007: Polaris Software Lab Ltd (POLS.BO), recognized leader amongst specialty application service providers in the BFSI (banking, financial services and insurance) space, has announced fourth quarter and annual results for FY 2006-07.

For the year ended 31 March 2007, consolidated revenue was Rs 1032.37 crore, a growth of 25% over the previous year. Operating profit (EBITDA) was Rs 161.27 crore, indicating a 109% jump over the previous year and profit after tax (PAT) leapfrogged to Rs 101.06 crore from Rs. 21.30 crore, registering a 374% increase.

Success in the differentiated business strategy
With a unique and powerful combination of deep-dive domain expertise and a comprehensive next generation suite of banking products, Polaris provides smart legacy-modernisation services to the world’s leading banks and financial institutions.

With this differentiated strategy, Polaris has expanded its footprint into an enviable customer landscape of 70 strategic accounts in FY ‘06-‘07, as against 20 such accounts, 2 years back. This includes 11 out of the top 25 banks in the world. Polaris has been able to expand into these accounts on the strength of its micro vertical specialisation and it’s next-generation comprehensive product, Intellect SuiteTM, that is backed by a powerful and unique Services Oriented Architecture (SOA) back plane.

The success is reflected in the remarkable 147.52% annual growth in Intellect led revenues, compared to the previous year and 251.13% growth over the corresponding quarter last year. The revenue from Non-Citigroup accounts has grown by 61.73% compared to the previous year and 93.55% over the same quarter last year.

For the quarter ended 31 March 2007, consolidated revenue was Rs. 270.78 crore, up by 36.17% over the same quarter last year. Operating profit (EBITDA) was Rs. 32.16 crore and profit after tax (PAT) was Rs. 21.40 crore. Intellect led revenues continued to show a robust 10.30% growth over the last quarter, maintaining a creditable two-digit sequential quarter on quarter growth, for the last 4 quarters. Revenues from the Non-Citigroup accounts grew 6.45% (in dollar terms) over the previous quarter (Q3 ’06-’07).

Financial Highlights for the quarter ended 31 March 2007

1. Intellect business contributed to 20.64% of the overall revenues
2. 12 new customers chose Polaris as their preferred specialty solution provider
3. Revenue contribution from the Americas 34.40%, Europe 32.61% and Asia Pacific 32.99%
4. Optimus revenues stood at Rs. 9.30 cr, contributing to 3.43% of the revenues
5. Citigroup business contributed to 40.60% of the quarterly revenue
6. The Talent strength of the company stood at 8668

Mr. Arun Jain, Chairman & CEO, Polaris Software Lab, said, "1000 Crore is a critical size in the journey of Polaris in its 14 years of existence. I am privileged to be a member of the team that architected, designed and executed the differentiated IP led strategy focused on Investment Banking, Corporate Banking, Retail Banking, Credit Cards, Enterprise Solutions and Risk & Treasury to build a strong growth canvas around 70 global accounts."

Mr. Arup Gupta, Chief Operating Officer, Polaris Software Lab, said, "The 61% growth in revenues from Non-Citigroup accounts and the growth in Intellect led revenues by a whopping 147% over the previous year is immensely satisfying and an indicator of the success of the Intellect led strategy that we embarked on. With 15 AAA, 16 AA and 28 A global accounts, we will be more focused on account mining for consistent and predictable growth."

Mr. R Srikanth, Chief Financial Officer, Polaris Software Lab, said, "The EPS for FY ’06-’07 has moved to Rs. 10.28, from Rs. 2.17 last year. The currency fluctuation is certainly creating some unpredictability though we have hedged 48.62 Million $ at an average rate of Rs. 45.08. For the FY ‘07-’08 business plans, we have a 70 account landscape, clearly segmented for growth prospects. We have the confidence to grow over 25% in revenues in the current fiscal."

Source : Equity Bulls

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