Chennai: Polaris Financial Technology Ltd, a software services provider, posted a 33% fall in profit in the December quarter from the year earlier, missing estimates, due to the slowdown in Europe coupled with the impact of Hurricane Sandy.
The company posted a marginal increase in revenue to Rs.573 crore in the third quarter.
Third-quarter net profit fell to Rs.40.66 crore from Rs.61.07 crore. Bloomberg had estimated a profit of Rs.60.5 crore on revenue of Rs.600 crore, based on a poll of analysts.
“The banking and financial sector is heavily dependent on consumer spending, which is still not close to the levels we saw in 2008. So banks and other financial institutions will not be compelled to spend on information technology. Until such time consumer spending improves, we will see subsided results from companies such as Polaris,” said Alok Shende, principal analyst, Ascentius, a consulting and analytics firm.
Even Infosys Ltd, which posted a 4.2% rise in revenue sequentially in the third quarter, saw revenues from the banking financial and insurance sector remain flat, Shende said.
Polaris saw revenue erosion of $800,000 from New York-based clients due to their operations being affected by Hurricane Sandy during the quarter.
Even though the company won nine deals in its product business, the slowdown in Europe impacted three deal closures and revenue recognition this quarter, said Govind Singhal, president and chief operating officer, Polaris Financial Technology Ltd.