The Hindu Business Line : Polaris Software posts 46-pc drop in net profit

POLARIS Software Labs has reported a 46.2-per cent drop in net profit to Rs 12.96 crore on sales of Rs 209.38 crore for the quarter ended June 30, 2005 compared to a net profit of Rs 24.09 crore on sales of Rs 179.59 crore for the corresponding quarter last year.

"The bottom line is not good and has not grown as our top line. This is a genuine concern for shareholders," Mr Arun Jain, CEO, Chairman and Managing Director, Polaris, told the company's shareholders. "We have invested in products and solutions for the last two years, and we will see results in the next few quarters," he said at the company's annual general meeting.

According to Mr Jain, Polaris has invested around Rs 50 crore in Intellect suite of products and Optimus (the company's business process outsourcing firm) in the last two years.

In technology business it takes 10-15 years for things to settle down, and the company would do better in future with all these investments in place, he said.

During the June 2005 quarter, selling and marketing expenses for Polaris increased to Rs 20.51 crore (Rs 14.37 crore), depreciation and amortisation was Rs 12.25 crore (Rs 8.71 crore), says a company press release.

Polaris' three businesses — software services, Intellect suite and Optimus — had shown growth, and this was the first sign of validation of the company's strategy to service global institutions and banks, Mr Jain said in the release.

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