Polaris Revenues Register Growth of 29%; Intellect Sales Cross Rs 500 cr mark

Chennai, India - 24 April 2012

Services business grew by 25% and Intellect business grew by 43%

Polaris Financial Technology Ltd. (POLS.BO), a leading global Financial Technology company, today announced the fourth quarter and annual results for FY 2011-12.

Key Performance Metrics

For the year ended 31 March 2012:

  • Revenue grew by 29% to Rs. 2052 crore from Rs. 1586 crore; And for the quarter, Revenue grew by 19% Y-o-Y to Rs. 520 crore from Rs. 437 crore
  • Operating Profit (EBITDA) grew by 20% to Rs 287 crore from Rs. 239 crore; And for the quarter, EBITDA grew by 9% Y-o-Y to Rs. 63 crore from Rs. 58 crore
  • Profit after Tax (PAT) for the year ended 31 March 2012 grew by 9% to Rs. 221 crore from Rs. 202 crore; PAT for the quarter stood at Rs. 61 crore

Highlights for the Quarter Ended March 31, 2012

  • Polaris bagged a deal for 15 years with a leading European bank having an asset base of $350 billion and over 200,000 corporate clients
  • Polaris’ innovative role-based workstation, Intellect CBX was picked for an Austrian bank which is one of the largest financial services providers in Central and Eastern Europe
  • Intellect Insurance expanded its US footprint with a significant deal from one of the largest Insurance and Financial services companies in the world with more than $135 billion in statutory assets
  • Quarter revenues were well distributed across all key business geographies with the Americas contributing 47.77%, Europe 23.69%, IMEA 12.10% and Asia Pacific 16.45%
  • Polaris launched the first Wealth Management tool on iPad - Intellect FABX (Financial Advisor Business eXchange) - at the Harvard Business Club in New York City, US
  • Cash and cash equivalents stood at Rs. 390 crore at the end of the quarter

Pioneering Initiatives at Polaris

  • First transformational deal in Core Banking to go live in under one year. Polaris signed its largest Intellect deal with Reserve Bank of India, the country’s Central Banking Institution, to implement a centralized Core Banking Solution across the bank
  • Fastest growth rate in the product business globally. Intellect business recorded an annual growth rate of 43%, which is the highest in the BFSI product space when benchmarked against other listed product companies

FT Sourcing

FT Sourcing revenue crossed Rs1,500 crore and grew 25% for the year ended 31 March 2012. The last quarter saw a number of significant deals in the FT Sourcing space:

  • Polaris signed a deal with one the leading and most influential stock exchanges in the United States to deploy its managed services
  • A leading global financial services company headquartered in Zurich companies dealing with, institutional clients and high-net-worth private clients worldwide signed on Polaris for ADM services
  • One of Australia's leaders in research and development and a premier provider of systems, products and services in both commercial and defense areas chose Polaris’ Application Management Services
  • A leading financial institution in the Middle East with over 500 branches in 30 countries spanning five continents picked Polaris services to build Testing Practice CoE
  • A leading insurance company offering client-focused life insurance, investment and savings products to consumers in Asia, Latin America, Middle East and Eastern Europe chose Polaris' front end system for the APAC region

During the year, Polaris opened new global offices in Chicago, Malaysia and Philippines. And set up Business Solution Centres at Pune, Thane and Bangalore. Polaris’ Malaysia facility was awarded the coveted Multimedia Super Corridor (MSC) status – a government designated zone in Malaysia designed to accelerate the information and knowledge area.

Global Acceptance of FT Intellect

Intellect gained further momentum during FY 2011-12 and performed way ahead of its peers in the industry by growing a prodigious 43% for the year ended 31 March 2012. With increasing deal sizes, the revenue from Intellect business crossed the milestone mark of Rs 500 crore.

11 new Intellect wins across Banking and Insurance were recorded in the quarter and a total of 47 new Intellect wins were recorded during the year.

During the year, Polaris took pride in 4 transformational deals:

  • Q1 started with Polaris signing its largest Intellect deal with Reserve Bank of India for USD 55 million for a period of ten years, to implement a centralized Core Banking Solution at all its offices encompassing all banking and accounting operations to align with its current and future IT requirements, including a single General Ledger for the bank.
  • In Q2, Intellect won the second mega 10 million dollar deal when the world's second largest banking and financial services group headquartered in London, trusted Polaris with a Cash Management deal.
  • In Q3, a leading global bank with presence in over 25 countries providing a range of banking and financial products and services to around 8 million customers worldwide signed a $ 20 million deal with Polaris
  • In Q4, the company signed a 15-year period deal with the largest Nordic bank in Europe which picked Polaris’ flagship Intellect Liquidity Management Platform which will simplify the application landscape for liquidity management in the bank and ensure that 'Go To Market' time for new liquidity products is reduced globally.

Business Highlights for the Year

In the last quarter, Polaris signed an agreement to acquire the balance 49% equity shares of Indigo TX Software Private Limited from its shareholders to merge the company with Polaris. Polaris had acquired 51% equity shares of Indigo TX in March 2010.

Polaris submitted a proposal for demerger and merger of Optimus for operational integration and the approval process is in progress.

With the inauguration of two new office facilities in Chennai, Polaris has acquired office space of more than one million square feet globally.

The company’s Human capital asset base stood at 12,886 employees as on March 31, 2012, while attrition rate was 15.60% for the quarter.

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

During the year, the company signed a Joint Venture Agreement with Sonali Bank Ltd., the largest Nationalized Commercial Bank in Bangladesh and Bangladesh Commerce Bank Ltd. (BCBL) to form Sonali Polaris Financial Technology Ltd (SPFTL) where Polaris will hold a 51% stake. This JV has created significant job opportunities in the local market.

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.

  • Polaris’ Intellect won the XCelent Customer Base Award for Asia-Pacific Region and was ranked 4th among Global Core Banking Vendors in Celent Big Leagues Table Report 2012, attaining the highest growth in the Core Banking category globally
  • In TowerGroup’ Corporate Executive Board (CEB) Financial Planning Technology Analysis, Intellect Wealth was ranked amongst the top 3 global vendors in "Breadth of Functionality"
  • Polaris emerged as a Major Contender in the 2012 Everest Group PEAK (performance, experience, ability, knowledge) Matrix for large sized multi-year Capital markets applications outsourcing (AO) relationship
  • Polaris was listed as one of the top three Indian companies in the 2011 ‘European Union Industrial R&D Investment Scoreboard’ for its investment in research and development. The report is a benchmarking tool which contains economic and financial data of the world's top 1,400 companies ranked by their investment in research and development (R&D). Only 18 Indian companies figured on the global list
  • Polaris’ social initiative, Ullas Trust, that recognizes academic excellence in students from the economically challenged sections of the society, was presented the Blue Dart Global CSR Award 2012 for the 'Best Corporate Social Responsibility Practice Overall’
  • American Society for Training & Development (ASTD), the world’s largest association dedicated to workplace learning and performance professionals, certified Polaris for the second year in a row as a ‘Champion of Learning’ for its contribution towards imparting learning programs to employees across the organization

Management Statement

Arun Jain, Founder, Chairman & CEO, Polaris Financial Technology Limited said, “It is satisfying to see that our Polaris 3.0 strategy of Repeatable, Predictable and Profitable growth has paid off. In the last four years, revenue in both product business as well as services doubled and PBDT grew from Rs 135 crore to Rs 330 crore. As we embark on the Polaris 4.0 phase of our growth journey with the two well-defined business value pyramids - products and services- Polaris is uniquely positioned to double its revenue in the next 4 years.”

Govind Singhal, President & COO, Polaris Financial Technology Limited said, “As we understand the momentum of outsourcing is slowing down worldwide as predicted by Nasscom, value differentiation is key to winning business from existing players. We are working on more than 6 RFPs that have come for renewal.”

Ramaswami SR, CFO, Polaris Financial Technology Limited said, “In our portfolio of 22 products, 2 products crossed Rs. 100 crore revenue each and 3 products crossed Rs. 50 crore. At this point of time we will be investing additional Rs. 50 – 60 crores in sales and marketing to get full benefit of traction in the marketplace in the coming year.”

Revenue Guidance: Polaris is expect to grow at 17% - 20% for the fiscal year ending March 31, 2013; Revenues are expected to grow in the range of Rs 2400 – Rs 2460 crore.

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