See 17-19% growth this year: Polaris

In an interview to CNBC-TV18, Arun Jain, chairman and chief executive officer of Polaris says the company is looking at 17-19% growth this year. "We are on the right track for building a good EPS growth this year," he adds.

Below is the edited transcript of the interview with CNBC-TV18's Latha Venkatesh and Gautam Broker. Q: Your stock has been doing extremely well in the past couple of weeks. There is optimism about deal wins. Could you tell us if the company has signed any new deals recently or any deals in the pipeline? Could you give us details about product side of your business? A: There are two categories. We are in two businesses like service business and product business, which is growing robustly over the last few years. Last year, we have grown almost 29% in revenue terms. In service business, we have three large deals. One or two is getting closed within this quarter. One or two may be closed next quarter. Product business deal size could be between USD 10 million and USD 30 million. We may be looking for two-three such deals. We are pursuing it. Since our revenue recognition policy on the product business is on effort basis rather than upfront license recognition, it gets distributed across the quarter. We are looking at 17-19% growth this year. I think we are on track on that. With operational efficiency engine ticking in, the cash, which was depleted last quarter, we are planning to increase by Rs 100 crore. So, the operational matrix is in place. We are on the right track for building a good EPS growth this year. Q: The only problem in the earnings last quarter perhaps was the increase in DSOs (days sales outstanding). Has there been any progress on that? Where is it likely to be at the end of this quarter? A: DSO should improve by five-six days this quarter. More important is the cash in the kitty, which was Rs 329 crore last quarter, should go up by Rs 100 crore this quarter, in single quarter itself. So, operational matrix is our focus for this quarter. Q: By year-end, how can you improve your DSOs and also your total cash flow? A: By the end of the year, we will be investing some cash in acquisition and other things. We are targeting cash of between Rs 500 and Rs 550 by the end of the year. Rest of it would be invested for some acquisitions or growing the revenue inorganic way. Q: Can you provide us some details on the acquisition size geography, any colour that you can give us? A: We look for acquisition to acquire customers in the new geography. So, our product suite is one of the most comprehensive suites in the world. It takes a lot of time to sign up its first contract with the customer. We look to acquire company that has got more than 30-40 customers.