Buy Polaris Software With Stop Loss Of Rs 175

Buy Polaris Software With Stop Loss Of Rs 175Technical analyst Sanjay Surekha maintained 'buy' rating on Polaris Software Lab Limited stock with a target of Rs 220.

According to analyst, the stock can be purchased with a stop loss of Rs 175.

The stock of the company, on February 04, closed at Rs 191 on the Bombay Stock Exchange (BSE).

The share price has seen a 52-week high of Rs 215 and a low of Rs 143.95 on BSE.

Current EPS & P/E ratio stood at 19.24 and 10.26 respectively.

Polaris Software Lab registered an increase of 25% in its net profit, which stood at Rs 50.13 crore in the third quarter ended December 2010.

The company recorded a profit of Rs 40.07 crore during the same period of FY10.

In a consecutive manner, company's PAT surged 4% while operating profit (Ebitda) increased 26% to Rs 63.91 crore as against Rs 50.57 crore.

Revenue climbed up 18% to Rs 399.90 crore as against Rs 338.89 crore in the year ago period.

The company bagged a total of 29 deals this quarter out of which 19 were scored by the company's intellect product biz, which made around 23.3% of the quarterly revenue.

Arun Jain, chairman and managing director of Polaris, stated, "There is an increased cost of replacement. Salaries have gone up by 25-40% affecting campus recruitment. These hikes are bringing down margins of our services business. We had foreseen this and diversified into products segment back in 2006 to offset these losses. Overall, we are aiming to be a $100-million business in the next few quarters."

The company is also looking to amplify in Latin American nations such as Brazil, Argentina and Mexico in 2011.