The company's consolidated net sales were at Rs 351.14 crore versus Rs 316.98 crore on QoQ basis. Its Q2 net profit includes Rs 13 crore sale of investement. The company increased its full-year EPS guidance to Rs 13.5 from Rs 12.5.

Arun Jain, Chairman and CEO, Polaris, said the growth in dollar revenues is seen at 5.5% while rupee revenue growth stands at 11%. He said shareholder nod has been taken to have a separate real estate entity.

According to Jain, pricing is stable. "Forex hedges stand at USD 120 million, hedged at Rs 40 per dollar."

Arup Gupta, Executive Director and COO, Polaris, said to take care of foreign exchange fluctuations, the company is going through some hedging to make sure that the business is protected at least for the next 6-8 quarters.

Here is a verbatim transcript of the exclusive interview with Arun Jain and Arup Gupta on CNBC-TV18. Also watch the accompanying video.

Q: You have upped your EPS guidance in rupee terms, but could you just take us through your dollar performance as well in this current quarter, what you have achieved in terms of revenues and profit growth, and how the dollar performance is going to look because the rupee-dollar has swung around quite a bit this time?

Jain: We have grown 5% each in the last two quarters. In Q2 we have grown 5.01%, and in rupee terms it is 11%. But in dollar terms it is 5% on the revenue side. On the profit side, we have grown 27% QoQ sequentially and 89% YoY. So, those are our numbers for the investors.

Q: Just a couple of clarifications, one on the deferred buyback, any thoughts on that? Is there anything on the real estate angle, the property that is lying in Chennai and Gurgaon, have you taken a decision from the management?

Jain: The process of real estate is going on. We had taken a decision last time that it would be a separate company. Shareholder approval has been taken now, and the next process will start.

It is not a critical part of our journey, which I mentioned last time, but it is just that some of the assets that have not been leveraged, we can leverage it as and when it is right.

Q: What exactly has been the experience with pricing this quarter around?

Jain: Pricing has been constant. We are not finding any significant pressure on pricing as such because we were not on a high in pricing anyway.

Q: What are you factoring-in right now by way of rupee-dollar rates and how might that impact your margin performance? Are you working with a band of operating profit margin that you want to remain within over the next few quarters?

Gupta: For monitoring our business, we obviously fix a rate at which we will monitor the business going forward, so that the business performance is relatively transparent to the actual foreign exchange transactions that are happening in the market. To take care of the foreign exchange fluctuations, we are going through some hedging to make sure that our business is protected at least for the next 6-8 quarters.

Jain: Just to extend on Arup’s point, we have hedged USD 120 million at the beginning of the year at Rs 40. So, all our plans of hedging is at Rs 40. Though the price has gone up, investors may not get the benefit of Rs 47-48.

But from our internal perspective, we are confident of our EPS guidance based on Rs 40. So, we can manage our business metrics properly at Rs 40 till March.

Q: Can you give us some more clarity on what is going on with your clients in the BFSI space since most of your business comes from there, with specific reference also to Citi, which is one of your large clients?

Jain: Definitely there is a lot of uncertainty. In the last six months, we have three clients of ours going through turbulent times. First it was Bear Stearns, then AIG and then Lehman Brothers. But all three of them have been absorbed in the right manner by the new owners. When we are delivering especially solutions to these customers, we are finding that the new client is accepting our services in the same spirit as what we had been contributing to the previous client.

So, we need to be cautious over the next two quarters till the time this dust settles down. But what we are finding is that most of these large customers’ focus on strategic solutions is gaining momentum. It is moving from a just pure arbitrage to a business outcome based solution.

So, that is where we are finding that the intensity of our pre-sale or business development effort has gone up. So, we need more people who can communicate to the customer on what solution is going to deliver value to our customers. I think the initiative that we took two years back on consulting is helping us out in articulating that value.

So, our pre-sale costs have gone up recently in the last two quarters, and we expect pre-sale costs to go up in the next two quarters as well.

Q: What kind of full-year guidance on revenues are you setting out in dollar terms for Polaris?

Jain: Rs 135 crore is our profit at the end of the year. We are saying that we are doing our calculations at the rate of Rs 40.