Strong Rupee Weighs On Polaris Net Profit
24 Apr 2008 | Print
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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
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