Polaris Revenues Up by 31%

Chennai - 24 October 2011

• Intellect Revenues Up by 32% Sequentially and 68% Annually
• Quarter Revenues Cross 500 crore

Polaris Software Lab Limited (POLS.BO), a leading global Financial Technology company, today announced the second quarter results for FY 2011-12.

Key Performance metrics
For the quarter ended September 30, 2011, Revenue grew by 31% Y-o-Y to Rs. 509.74 crore from Rs. 388.34 crore and 13 % Q-o-Q to Rs. 509.74 crore from Rs. 450.19 crore. Operating Profit (EBITDA) grew by 25 % Y-o-Y to Rs. 75.54 crore from Rs. 60.24 crore and 19 % Q-o-Q to Rs. 75.54 crore from Rs. 63.50 crore. Profit after Tax (PAT) grew by 12 % Y-o-Y to Rs. 53.94 crore from Rs.48.15 crore and 21 % Q-o-Q to Rs. 53.94 crore from Rs. 44.56 crore.

Highlights for the quarter ended September 30, 2011
• Product revenues grew 68% to over Rs 139 crore, up from Rs 83 crore during the same quarter last year; 12 new Intellect wins across Banking and Insurance were recorded in the quarter
• Services revenue grew 21 % to Rs 370 crore from Rs 305 crore during the same quarter last year.
• Quarter revenues were well distributed with Americas contributing 45.43 %, Europe 22.40 %, IMEA 15.25 % and Asia Pacific 16.92%
• Cash and cash equivalents stood at Rs. 417 crore at the end of the quarter
• During the quarter, Intellect won the second mega deal of over Rs 40 crore, coming close on the heels of the Reserve Bank of India deal
• Intellect Insurance won significant deals in Canada and Australia
• Polaris launched the newest version of its CBX solution- Intellect CBX 3.0 at Sibos 2011 in Toronto. Designed for the Global Transaction Banking (GTB) platform, the latest version of Intellect CBX 3.0 will provide banks with an architecture that will enable them to add new products with ease

Revenue Guidance
In view of the robust volume growth and strong performance of Intellect, the Revenue for the year 2012 has been revised to Rs 2014 crore - Rs 2060 crore from Rs 1968 crore - Rs 2014 crore in the last quarter.

Intellect Business
The strong focus on account management and delivering customer delight has resulted in Intellect continuing its Leadership journey in the Financial Technology (FT) industry. Polaris’ Intellect registered 12 wins during the first quarter and Intellect sales contributed to 27% of the quarterly revenue. Intellect revenues grew 68 % Y-o-Y to Rs 139 crore from Rs 83 crore during the same quarter last year.
During the quarter, two global majors for Retail and Corporate Banking picked Intellect Cash Management and Intellect Liquidity solutions.

One of the largest banking and financial services organisations in the world with around 7,500 offices in 87 countries has trusted Polaris to lead the transformational agenda for their European operations by choosing Intellect Cash Management and Intellect Liquidity solutions.

Canada’s largest bank as measured by assets and market capitalization with offices in 57 countries has implemented Polaris’ Intellect Insurance to offer better products and services to its customers.

FT Sourcing (Managed Services)
During the quarter, Polaris inaugurated a new facility at Pune to meet the growing needs of the BFSI domain. The facility enhances Polaris' distributed delivery capability, ensuring efficient client servicing and would play a key role in the expansion of offshoring capabilities beyond Centers of Excellence located in other geographies. The Pune office would support our global banking clients and benefit from its proximity to Mumbai and availability of a local talent pool.

Business Initiatives – FT GRID

Polaris successfully launched the World’s Largest FT Grid with the capacity to cater to 100 Million Customers (MC) in partnership with IdenTrust and IBM. It will enable Polaris to offer its Financial Technology infrastructure and banking products on a pay-per-use (cloud) model to banks and financial institutions through a ready-to-use platform with industry-standard hardware, middleware, RDBMS and network connectivity components changing the face of banking globally.

The FT Grid is a complete Enterprise Class Cloud+ Solution with multiple features such as virtualization, scalability, reliability, global reach, 24x7x365 support with vernacular localisation and information security that would enable services to be provided at the customer's doorstep. Its rich functionality and yet easy to implement features will help banks overcome difficult core banking implementation complexities across the board. The FT Grid will enable banks and financial institutions to readily access applications on a robust infrastructure, helping them avail services on per account / branch per month or equivalent usage based charges. It will also allow clients to avoid license procurement and maintenance, reducing costs significantly.

Corporate Update
Mr. R. Srikanth, who served as President & Group CFO, Polaris Software, has decided to move on after a stint of over 5 years at Polaris. Mr. S.R. Ramaswami (SRR) will take over as the new Group CFO of Polaris Software. SRR, a proven business leader, has been an integral part of the Polaris Leadership team. In his former role as Global Head of Strategy, he displayed strong acumen in his ability to connect business with finance, which has proved invaluable in architecting the large and complex deals that Polaris has been handling. With Polaris’ wholesome offering of products and services, the company is confident in that his new role as Chief Financial Officer for the group, SRR will perfectly straddle business and finance with a strong focus on revenue realization.

Awards and Recognition
Polaris has consistently been recognized and awarded by analysts and other influencers. Listed below are some of the recognitions we received in the last quarter.

• Gartner’s report titled “Four Vendor Segments Banks Must Consider When Modernizing Payments” placed Polaris’ Intellect amongst the Global top 5 vendors to be placed in all the 4 segments (Dedicated Payment Solution Providers, Domain-Specific Solution Vendors, FS Application Providers, Infrastructure and Supporting Technology Vendors).

• Polaris bagged the “ISV Partner of the Year-2011” award for Asia-Pacific from Oracle at “Oracle Partner Executive Forum-2011” held at Singapore. This award was given to Polaris in recognition of its outstanding contribution in delivering solutions to customers across the Oracle product portfolio

• IDC has recognised Polaris’ PACE MBX as the only specialists BFSI vendor among the 16 global vendors who provide Mobile Technology oriented Testing solutions in a report titled “Mobility Testing Services: Providers' Cross - Platform and Usability
Expertise Helps Customers Build Strategic Advantage”

• Arun Jain, Chairman & CEO, Polaris Software was selected to be featured in Pathfinders, a coffee table book initiated by The Times Group, that lauds the achievements of extraordinary personalities in the IT and ITES industry. The book profiled Arun Jain and Polaris in a 5-spread feature that stated, "Encouraging dreams, enthusiastic about creating, striving to make a difference, setting seemingly unattainable goals…Polaris Software Lab Limited, in more ways than one, has been created in the image of its affable and resolute Chairman & CEO, Arun Jain.”

• Bank of Montreal’ Customer On-boarding Platform Transformation featured among the two Best Case studies on Successful Implementations by Banks in Forrester’s report on "Best Practices: Off-The-Shelf Banking Platform Transformation”.

•Intellect SEEC is amongst the two vendors globally to be referred by Gartner to define the technology mainstream adoption of SOA Component Models for Life Insurance in Gartner’s report titled “Hype Cycle for Life Insurance, 2011”

• Gartner positioned Polaris in the Leader’s Quadrant in their report on “Gartner’s Magic Quadrant for International Retail Core Banking for 2011” for the second consecutive year

Arun Jain, Founder, Chairman & CEO, said, “Our vision of being a global Financial Technology leader got another boost during the quarter with the launch of World’s Largest FT Grid. Our deal sizes have consistently grown both in size and in the complexity showing steady progress from ‘referencable wins’ to ‘distinctive deals’ over the last few quarters. With increasing number of successes among high street banks globally and a very successful show during SIBOS 2011 at Toronto, our sales funnel in North America is looking very attractive and we are bullish about exploring those opportunities.”

Govind Singhal, President & COO, Polaris Software., said, “We are focused and have been continuously progressing towards global Financial Technology leadership owing to our advanced Managed Services model. To take this to the next level, we are augmenting our capacity both in terms of more sophisticated solutions as well as highly skilled manpower to achieve superior execution capabilities for our global clientele.”

R. Srikanth, President & Group CFO, Polaris Software, said, “Receiving good traction from our integrated Products and Services model, I am happy to revise our Revenue Guidance to USD 440 million-USD 450 million from USD 430 million- USD 440 million. The EPS guidance is also being revised to Rs 22.65 – Rs 23.47 from Rs 21.95 – Rs 22.35.”

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