Polaris Financial Technology (formerly Polaris Software Labs) has reported a 32 per cent drop in net profit to Rs 41 crore in the third quarter ended December 2012 when compared with Rs 61 crore for the corresponding quarter last year.
Revenue was Rs 573 crore, which was the same in the corresponding quarter of the previous year.
Arun Jain, Founder, Chairman and CEO, Polaris, said this has been a challenging quarter. “However, we continue to build momentum with 16 new business wins. These wins will lead to revenue accruals in the coming quarters.”
Restructuring
Its board of directors has authorised its management team to explore options, including appropriate restructuring, that would provide an impetus to the company for the next stage of its growth, in order to maximise shareholder value, says a company press release.
The product business took a hit on two counts. Firstly, due to the European slowdown, Polaris could not take three important deals to closure and revenue recognition. “We could not accrue licence revenues for such deals in the quarter,” said Govind Singhal, Chief Operating Officer, Polaris.
Secondly, the company’s US-based IdenTrust business (it is a strategic investment of Polaris) booked a loss of Rs 12 crore in the third quarter. If this is excluded, the net profit would have been Rs 52.55 crore, he said.
Service business has been steady barring an $800,000 impact (revenue erosion) on account of Hurricane Sandy, he said.
Polaris in the release said that the “Accounting Standard 30 (AS30) adjustments were done to neutralise the forex impact of hedging on the topline. Polaris had an impact of the hedge of $25 million in the third quarter.”
The EBIDTA (earnings before interest, depreciation , tax and amortisation) would be Rs 94.17 crore if the AS30 adjustment is excluded.”
On the BSE, the company’s share price closed at Rs 128.55, a decline of Rs 13.10 or 9.25 per cent over the previous day’s closing price.