Chennai  : Polaris Software Lab Limited (POLS.BO), a leading Financial Technology company, today announced the second quarter results for FY 2010-11.

Key Performance metrics

For the quarter ended 30 Sep 2010, Revenue grew by 15% to Rs. 388.34 crores from Rs. 338.31 crores. Profit after Tax (PAT) grew by 37% to Rs. 48.15 crores from Rs. 35.20 crores compared to the same quarter last year. Operating Profit (EBITDA) grew by 33% to Rs. 60.24 crore from Rs. 45.29 crore.

In dollar terms, Revenue grew by 20% to USD 83.59 million from USD 69.93 million, Profit after Tax (PAT) grew by 42% year-on-year to USD 10.36 million from USD 7.27million. Operating Profit (EBITDA) grew by 38% to USD 12.97 million from USD 9.36 million.

IntellectTM expansion

Polaris’ flagship suite of Intellect products registered 17 wins in the second quarter and revenue from Intellect business grew 45% in dollar terms year-on-year.

Intellect business showed traction in the US and Canada where a top bank went live with Polaris IntellectTM GUB. A premier bank in Japan went live with Intellect solution. A leading bank in Egypt picked Polaris’ Collect solution and a Tier 1 global bank went live with an innovative and complex solution in all its branches across Asia.

During the quarter, India’s largest bank sponsored mutual fund, SBI Mutual Fund went live on Intellect GUB. Andhra Pradesh State Cooperative Bank Limited chose Polaris’ Core Banking Solution (CBS) for all its 22 District Central Cooperative Banks (DCCB) spread across the state.

Global Sourcing

The quarter witnessed improvement in global sourcing traction with Total Services Revenue increasing by 10% sequentially (q-o-q). Europe grew 13% on a sequential basis during the quarter. All global G10 accounts showed quarter-on-quarter growth.

Market and Analyst Recognition

•Gartner positioned Polaris in the Leader’s Quadrant in their report on Gartner’s Magic Quadrant for International Retail Core Banking for 2010, saying Polaris was “identified as a vendor to demonstrate strong development methodologies and have a measurable strategy for disaggregating core banking functionality..”

•Forrester in their report Right And Wrong Reasons To Work with Tier Two Offshore Providers stated: “Polaris is an industry vertical/business-side specialist with teams of business analysts who track industry trends and can proactively build solutions..”

•Tower Group’s report on Outsourcing for Innovation in Financial Services said: “Polaris is one of the top vendors who has introduced lots of Innovation in Financial Services Outsourcing.”

Financial and Operating Highlights

•Net addition of 959 associates during the quarter, the highest in the last 12 quarters

•Americas and Europe grew 9% and 13% respectively q-o-q; Americas contributed 47%, EMEA 30% and Asia Pacific 23% of the quarter revenues

•Net Profit Margins improved 174 bps year on year

•Cash and cash equivalents stood at Rs. 477 crores at the end of the quarter; after Capex investment of Rs 40.68 crore and dividend payout of Rs 20.21 crore

•Annualized EPS grew by 36% to Rs. 19.43 from Rs. 14.27 in the same quarter last year

•The Days Sales Outstanding (DSO) stood at 44 days, reflecting high customer satisfaction and extreme execution

Arun Jain, Founder, Chairman & CEO, Polaris Software Lab Ltd., said, “New investments in technology have resulted in an upsurge in demand and the market is ready for the third wave in outsourcing. Polaris has prepared itself by adopting an integrated approach of products and services. We are well invested and prepared to ride this wave through license revenues and services around Intellect.”

R Srikanth, President & CFO, Polaris Software Lab Ltd., said, “Polaris’ proven low cost location (LCL) leverage using Managed Services Methodology has resulted in a significant increase in our global sourcing opportunities. Extreme currency volatility continues to be challenging and we are strengthening our operations model to protect our margins.”

Business Outlook

At the Rs/$ exchange rate of Rs 44.94, we are confident of meeting the guidance of 31-33% growth. We are gearing up internal operations in anticipation that the rupee appreciation could touch Rs 41-42.50 resulting in a drop in the EBITDA margin. We are focusing on accelerating license revenues and services linked with Intellect implementations.

To view the Unaudited Financial Results, please click on the link given below:

Unaudited Financial Results