Even as the fourth quarter net profit in 2003-04, for Polaris Software Lab Ltd took a severe beating, company officials are confident of better days in the coming quarters.

PSL has projected a topline growth of 22 per cent to 25 per cent and a bottomline growth of 25-30 per cent for the current fiscal.

The company had reported a dip in the net profit for the fourth quarter ending March 31, 2004 of 55 per cent over the third quarter and a 47 per cent dip over the fourth quarter of 2002-03.

Addressing the media at the inauguration of a new 'product dedicated centre' in Chennai, Arun Jain, chairman and managing director, PSL said, "Revenue from products could overtake revenue from services over the next seven-year time frame."

At present 85 per cent of the company's revenues come from services and 15 per cent from products. Jain has also projected revenue from products to grow at 40-50 per cent over the next three years while services will grow in pace with industry average of 17-25 per cent.

The company, according to Jain, has already invested Rs 50 crore (Rs 500 million) on the product development efforts and expects to invest another Rs 10 crore (Rs 100 million) during 2004-05.

While the company calls itself a leading provider of products and services to the BFSI segment, it has failed to bag any of the large banking and insurance contracts that have come to Indian IT companies.

In the last eight quarters some of the largest deals in the range of $25-50 million (annualised) went to the likes of Infosys, Wipro, Cognizant and TCS. PSL, according to industry sources was not even short listed.

On the banking front, Bank of America order was bagged by TCS and Infosys, Lehman Brothers order went to TCS and Wipro, J P Morgan Chase to Wipro, TCS, Cognizant and MphasiS, Key Bank to Wipro and Credit Suisse to Cognizant.

On the insurance front, the MetLife order was bagged by Cognizant and Patni and Prudential order went to Wipro.

Sometime ago speaking to Business Standard, Arun Jain had indicated that one of the strongest reasons for merging Orbitech with Polaris was to attain a critical size in order to pitch for big BFSI orders.

This, apparently, has not worked the way the company had expected. Without naming the clients or order size, Jain pointed out that 'two High Street banks from London' have signed annuity relationships with the company during Q4 of 2003-04.

The company revenue dependence on onsite work has also been on the rise. The four quarters in the previous fiscal saw revenue from onsite work moving up from 42.7 per cent to 46.6 per cent.

Given that off-shore work lends better margins, the strain of this onsite dependence is evident on the bottomline in the fourth quarter of 2003-04.

Added to this, various expenditure heads, including selling and marketing expenses, interest and depreciation have witnessed steep rise in 2003-04, explaining the unimpressive bottomline growth during the year. While the turnover jumped by over 50 per cent, bottom line grew by less than 5 per cent.