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Polaris Software posts Rs 5.7-cr net loss — Co upbeat as orders are in the pipeline

Our Bureau

Chennai , Jan. 30

POLARIS Software Lab Ltd has reported a net loss of Rs 5.70 crore on revenues of Rs 203.28 crore for the quarter ended December 31, 2005, against a net profit of Rs 18.27 crore on revenues of Rs 209.20 crore for the same quarter last year.

Selling and marketing expenses were Rs 19.12 crore (Rs 18.10 crore), general and administrative expense was Rs 25.31 crore (Rs 24.58 crore) and provision for doubtful debts Rs 4.85 crore (Rs 45 lakh).

"It was a bad quarter. With a few major orders in the pipeline, we expect better results in the coming quarters," Mr Arun Jain, CEO and Chairman, told investors in a conference call. This is the first time the company has posted a loss since its listing.

Polaris has won a large outsourcing deal from a multinational company that would see a team size of 500-600 people to be built in the next couple of quarters, Mr Jain said.

Mr Arup Gupta, President and COO, said that the company had won an order from a Chilean bank that would give an annual revenue of $3-4 million. There is also an order from a large European customer. Polaris is also in a few large RFPs (request for proposals) that may fructify in the coming quarters, he said.

Offshore billing rate for Polaris reduced to $19 an hour during December 2005 quarter as against $19.70 the previous quarter.

"We are facing some degree of pricing pressure," a company official told in the conference call.

The overall employee utilisation rate reduced to 72.75 per cent in December 2005 compared with 77.10 per cent the previous quarter. With a healthy pipeline the target is to reach 80 per cent in the next few quarters, said Mr Gupta.

Optimus, a Polaris subsidiary, increased its number of employees to 611 as on December-end compared with 353 the previous quarter.

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