On track to achieve USD 450-460 m in revenue: Polaris

In an interview to CNBC-TV18, Arun Jain, chairman & chief executive officer, Polaris gives details of their divestment plan. The company that is divesting its stake in IdenTrust in the hope of investing into another portfolio which can be more revenue generating.

On performance, Jain adds, "We are on track on meeting USD 450-460 million. So on rupee terms we should be meeting Rs 2400 crore, which is around 16-18 percent growth and EPS for initial guidance around Rs 24 EPS."

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Below is the edited trancript of Jain's copy.

Q: Your company, Polaris is looking to divest IdenTrust business. Could you tell us how much stake you are looking to divest? You all currently hold about 85 percent stake? What would be the current valuations of this business?

A: We have to divest because US government has a highly secured infrastructure which is of very high quality. We should get a premium on what investment we’ve made, but how much premium it should be, we don’t know as of now. However, in next 12 months, we would like to divest and invest in some other portfolio which can be more revenue generating. We have carved out almost USD 100 million equity for acquisition over the next 12-18 months. So, that is the whole inorganic growth portfolio we are talking about.

Q: For IdenTrust itself where have negotiations reached either in terms of whether you have found any firm bidders and how soon in terms of a timeline you expect this deal to get done?

A: You can't set any timelines for acquisitions whether we want to acquire or we want to divest. It is a question of right buyers. So, it could be anything between three months to 12 months and the range could be that large.

Q: It did contribute to your top-line though. Does it mean you may have to tweak or change your guidance that you have set out for the next year?

A: We might have to do that slightly. They generate close to USD 11-12 million on an annualised basis, but we are looking for some inorganic intake also. So I think that should get compromised, that should get readjusted based on some inorganic in and out.

Q: In your conference call post the earnings, you had indicated that the dollar revenue guidance now looks a little less than what you had earlier anticipated. You had spoken about numbers of USD 450-460 million. Are you on track to meet that?

A: Yes. We are on track on meeting USD 450-460 million. So on rupee terms we should be meeting Rs 2400 crore, which is around 16-18 percent growth and EPS for initial guidance around Rs 24 EPS.

Q: You all had also recently signed a deal to acquire contracts from Pyxis Systems. You all had spoken about it in Q2. Could you tell us what kind of revenue generation could you expect from this deal?

A: This is a small consulting firm in the capital market and risk area. We observed that risk is one of the high demand area of Wall Street and High Street at London. This is a team of 50 consultants which along with our capital market practice, is close to USD 100 million business and it can enhance that value. So, it is not direct revenue which is important here. It is about the revenue which will come in through this channel for overall business.