The Hindu Business Line : Polaris' dependence on Citigroup drops

Chennai May 7 The quarter-ended March 2007 saw a marked decrease in Polaris' dependence on its principal customer, the Citigroup. Revenues from Citigroup contributed only 40 per cent of Polaris' revenues last year, down from 58 per cent in the year before. Yet, in absolute terms, the Citigroup business slid only Rs 5 crore to Rs 110 crore.

Non-Citigroup business for the quarter was Rs 161 crore, twice as much as in the same quarter of the previous year. It was also higher than the Rs 153 crore achieved in the previous quarter ended December 2006.

Discussing the change in revenue pattern in the March quarter financial results with analysts, Mr Arun Jain, CEO, Polaris, said that it had been a challenge to reduce dependence on its largest customer.

Mr Jain had earlier said that Polaris aimed at keeping Citigroup's contribution to its revenues at around 30 per cent.

Citigroup's revenue for Polaris is likely to grow between 5 per cent and 10 per cent in the year, and the American company contributes annually over $100 million (Rs 450 crore) to Polaris.

As such, the challenge facing Polaris is to reduce dependence on a customer whose business is growing. To do this, the company has to grow its business from other customers faster, Mr Jain said.

This, however, does not mean that Polaris is not focusing on Citigroup's business. Mr. R Srikanth, Chief Financial Officer, Polaris, said Citigroup has got 70,000 jobs as per the policy announcement and they have reduced the number of vendors. "As we are the sole partners of Citigroup, we are likely to get a higher volume of business from Citigroup. The Citigroup was doing sound by all dimensions, and there is no question of Citigroup being defocused."

Meanwhile, Polaris will see its headcount crossing the 10,000-mark this year. In the current quarter alone, 2,000 people would need to be recruited, Mr Jain said.