Financial Daily from THE HINDU group of publications
Wednesday, Dec 04, 2002
Corporate - Outlook
Polaris sees steady growth at 5-8% post-merger
BANGALORE, Dec. 3
REVENUE of Polaris Software Lab Ltd, post-merger with Citigroup's unlisted technology arm Orbitech Solutions, is likely to grow five to eight per cent every quarter in the next financial year, the Chairman and Managing Director, Mr Arun Jain, told analysts.
Polaris, which announced its merger plans in May, revised the share swap ratio in October. Under the new plan, Orbitech shareholders will get 10.66 Polaris shares for every 25 they hold in that company.
The regulatory approvals regarding the merger are likely to be obtained by January-March quarter of 2002-03 and the integration of the companies is also likely to be completed by then. The merger is set to be effective from November 1, 2002.
The merged entity is likely to earn 28-30 per cent margins at the operating level in the second half of current financial year, Polaris management said. Ten clients will be in $5million -$10million category, 12 clients in $1million -$5million and about 27 clients in the $50,000-$100,000 category in the next fiscal.
Citigroup and NEC engagements that account close to 50 per cent of Polaris' revenues are likely to remain somnolent for a few more quarters, even as the company expects its revenues in the next two quarters in the current fiscal to grow at five-eight per cent sequentially.
Citi, NEC, AIG, Commerzbank and Shinsei Bank will bill about $5million -$10million revenues in the next financial year, Polaris management indicated. The company expects to derive close to 80 per cent of its revenues by servicing clients in the banking, financial and insurance sectors post-merger.
Orbitech currently has a cash balance of $7 million with debtor days at 92. The company counts 80 Citigroup entities as its clients and close to 73 per cent of its revenues comes from repeat business.
Orbitech is likely to bill $33 million-$35 million revenue in the October-March period of financial 2002-03 compared to $40 million billed in the first half of the current financial year.
Polaris reported consolidated net profit of Rs 23.63 crore ($4.9 million) on income from services and products of Rs 146.44 crore in the first half of 2002-03.
Orbitech had a net profit of $13.04 million in the half-year to September on revenue of $40.43 million.
Stories in this Section
The Hindu Group: Home | About Us | Copyright | Archives | Contacts | Subscription
Group Sites: The Hindu | Business Line | The Sportstar | Frontline | Home |
Copyright © 2002, The
Hindu Business Line. Republication or redissemination of the contents of
this screen are expressly prohibited without the written consent of
The Hindu Business Line