Comments
Prabhudas Lilladher
Polaris (Accumulate)
CMP: 158.75
Target: ₹215
Q3FY15 results — miss on all counts: Polaris’ Q3FY15 results were below expectation. Revenue for the quarter declined by 0.2 per cent q-o-q to ₹475.6 crore (PL estimate: ₹488.9 crore) and a decline of 2.2 per cent q-o-q in dollar terms to ₹42 crore (PL est: ₹48 crore). Ebitda margins contracted by 119 bps to 11.5 per cent (PL est: 13 per cent) despite currency depreciation, largely due to investments in sales and marketing. EPS declined by 19.7 per cent q-o-q to ₹3.9 (PL est: ₹4.85) due to lower other income and forex loss.
Investment to regain growth momentum: Management has undertaken efforts for investment in sales and marketing in North America, Japan and Australia. Moreover, they are looking to strengthen team in Europe in CY15. We expect investment from the management to start yielding positive result from FY16.
FY16 outlook healthy: Management has guided for around 10 per cent y-o-y revenue growth for FY16 with around 15 per cent Ebitda margin for Q4FY16. The confidence in growth was driven by outlook on deal pipeline and discussions with new logos.
Comments
COMMENT NOW
Comments
Comments have to be in English, and in full sentences. They cannot be abusive or personal. Please abide by our community guidelines for posting your comments.
We have migrated to a new commenting platform. If you are already a registered user of TheHindu Businessline and logged in, you may continue to engage with our articles. If you do not have an account please register and login to post comments. Users can access their older comments by logging into their accounts on Vuukle.