Polaris Software Lab Limited reported a 12 per cent increase in net profit to Rs 54 crore for the second quarter ended September 30, as against Rs 48 crore for the corresponding period last year. Revenue grew by 31 per cent to Rs 510 crore (Rs 388 crore).
A key driver to the better performance was the client winnings for the Intellect suite of products — a range that came into Polaris' fold through the acquisition of Citibank's software division and used in banking and insurance sectors. Intellect fetched 12 new clients, which according to the management provided the growth during the second quarter.
Intellect won the second mega deal of over Rs 40 crore. The first being a $55-million (nearly Rs 250 crore) deal from the Reserve Bank of India in May.
Out of the total revenue in September quarter, product contributed 27 per cent and the balance by software service. Revenue from product grew by 68 per cent to Rs 139 crore (Rs 83 crore). The Chennai-based information technology company said that during the quarter 12 new clients opted for Intellect.
Revised revenue outlook
Due to the increase in volume growth and Intellect's ‘strong' performance, Polaris has revised this financial year's revenue outlook to be in the range of Rs 2,014 crore to Rs 2,060 crore from Rs 1,968 crore to Rs 2,014 crore that the company projected in the preceding quarter, the release said.
Mr Arun Jain, Founder, Chairman and CEO of Polaris in the press release said that the deal size (revenue from a client) have consistently grown both in size and in complexity.
Elaborating on Mr Jain's views, Mr Srikanth, President and Chief Financial Officer of Polaris, said the average revenue from a client has nearly tripled in the last three years to $15-$20 million. On the complexity, gone are days of a pure ‘vanilla service' wherein it used to be a project-centric service with limited number of people. However, nowadays clients want Polaris to be involved in the complete system integration of an application or process through various models, including build, own and operate, by deploying more number of people.
Polaris has announced that Mr S.R. Ramaswami, president and head of Strategy and Corporate Development in the company, will be the new chief financial officer of the. He replaces the current CFO, Mr R. Srikanth, who will leave the company this month end after a stint of over five years.