Polaris Software targets six new markets
The Chennai-based Rs 10 billion revenue Polaris Software Lab Limited has decided to enter six new markets soon with its Intellect suite of banking software products.
The markets identified by the company are Russia, Eastern Europe, Latin America and China as well as Southern and Western Africa.
In the recent times the company's banking software products has been gaining increased acceptance amongst overseas and domestic banks.
Arun Jain, chairman and CEO of Polaris Software, told IANS the company earns around 20 percent from products and the plan is to increase it further to 30 percent.
His confidence stems from the fact that there are 11 good reference sites for Polaris while pitching for new business. Soon nine more such installations will go on live.
According to Jain, it takes at least a decade for a banking software product to get market acceptance whereas Intellect achieved that distinction in a matter of four years.
In 2002, Polaris acquired OrbiTech Solutions that owned 57 intellectual property rights (IPR) and refined the same to suit the market needs.
According to him, the banking software replacement market will take time to emerge since big banks will not replace their existing software systems in favour of a new one at one go.
The market in the West is more mature and the opportunity is for progressive modernisation of the existing banking software solutions, he added.
In the Asia Pacific region banks are automating their operations.
Jain said out of the 7,000 plus employees in Polaris, around 1,000 are in the product division. On the services side, Polaris is looking to mine more business from its existing clients.
The addition of new clients has reduced Polaris' dependence on the Citi Group for business.
"The share of Citi Group in the company's total revenue has come down to 38 percent from 65 percent two years ago," Jain said.
The Citi Group has been affected by the sub-prime crisis in the US but Jian does not see it impacting Polaris.
He said the company is successful in getting upward rate revision between 5-12 percent though it is not sufficient to meet the impact of rupee appreciation against the US dollar.
Polaris is now considering billing in local currencies even with Citi Group entities.
Queried about the currency hedging strategy adopted, R Srikanth, executive vice president and chief financial officer of Polaris, said the company follows short term hedging of six to nine months.
He said the company is improving its receivables position.
"It is now 62 days. For a long time it used to be 64 days," Srikanth said.