PolarisSoft net rises 15%, sales up 100%

Tuesday, 29 July 2003, 07:00 Hrs
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CHENNAI: Polaris Software lab has reported a net profit of Rs 16.6 crore for the first quarter ended June 30, Â’03 against Rs 14.4 crore recorded in the corresponding period last year, a growth of 15%.

The topline has gone up by over 100% to Rs 153.7 crore (Rs 73.6 crore), thanks to the acquisition of Orbitech Solutions. The operating profit for the period was higher at Rs 33.4 crore (Rs 16.9 crore). The operating profit margin has marginally increased to 21.7% from 21.6% on a quarter-on-quarter basis.

Following the integration of Orbitech with Polaris, the companyÂ’s staff cost will go up by Rs 24 crore annually (in the Q1 it has gone up by Rs 6 crore). However, the company claims that the merger has also reduced general and administration expenses to 8.9% of revenues (9.7%).
Commenting on the merger, Polaris chairman and CEO, Arun Jain, said, “Managing the emotional aspects of the merger was a truly learning experience. However, attrition which has gone up to 5%, needs to be better managed.

Litigations have also consumed more management time than anticipated. In addition, competitive pricing has reduced margins.”

The company has initiated 58 new opportunities during the last quarter, of which 21 were from Citi group. Its average billing rates were at $57 ($57.9) and $19.75 ($20.2) for onsite and offshore respectively.

The onsite-offshore revenue mix was at 42:58.
Citigroup is the top client contributing 63.3% of revenues. The software development expenses have been Rs 96.9 crore (63% of business revenues in comparison to 60.4% during the previous quarter).

The marketing and selling expenses have been at Rs 9.8 crore (6.4% of revenues compared to 6.2% during the previous quarter). The rupee appreciation has resulted in a net exchange loss of Rs 3 crore, mainly on receivables.

Source: IANS
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