Results beat; Guidance and Commentary gives comfort Firstsource (FSL) reported above expectation results, with a sequential revenue de-growth of 4.3% in CC terms (DART estm: 6.0% decline) due to positive surprise in BFSI Vertical (up 13.9% QoQ in $ terms) and OPM improvement of about 20bps...

The current quarter was impacted by lower volumes from top client. However, FSL expects contribution of top client to gradually improve from 13.7% of topline in Q1FY21 to 20.3% in Q4FY21E. Also, the company is seeing traction in its mortgage business (led by new home sales and may see better growth if delinquencies increases) and improvement in healthcare business. Further, six new logo wins in BFS, new logo win in media & communication, traction in UK retail & BFS and improvement in payer business is expected to drive revenues. In addition, FSL's strategy of...

Amongst the recent launches, partnerships & deal wins, it has launched pioneering platform-based service for Post- Closing' operations for a top mortgage lender an anchor client. In addition has signed on one of the world's leading card issuers for Digital Collections offering. In the Retail and Commercial banking arena, FSL is strategically partnering with top UK-based banks, enabling them to rapidly adapt to changing consumer preferences. More recently, have been playing a key role in...

During FY20 Vipul Khanna was appointed as CEO, prior to joining FSL, Vipul was the Executive Vice President & Global Head of Cognizant Digital Operations. CEO in his first address highlighted the strategic initiatives taken by the organization of ratcheting up investments in sales (Got-to-market; new capabilities), account management (business adjacencies) and solution development capabilities across sectors (Utilities and Technology Content Management) to further consolidate company's market position. This includes its newly launched Digitally empowered...

Results below estm; Guides steep cut in Q1 and Recovery Q2 onwards Firstsource (FSL) reported below expectation results, with a sequential revenue growth of 0.6% in CC terms (our estimate was 1.5%) due to weakness in healthcare segment (COVID impact - USD6mn) and OPM decline of about 40bps QoQ at 10.8% (our estimate was 11.2%). Healthcare segment de-grew by 1.3% QoQ as Providers clients faced decline in government funding in Feb and reduced number of elective surgeries and Payers volume got impacted as it witnessed lesser filling...

Revenues in the quarter were impacted by the Covid-19 pandemic. The company has indicated at supply side issues and client specific challenges impacting Q4FY20 revenues. In the near term, FSL expects pressure in healthcare business (due to lower elective surgeries & pricing pressure), challenges in top client (due to slowdown in UK economy) and seasonality in collections. Hence, we expect revenues to decline 10% QoQ in Q1FY21E with margins falling 200 bps. Going forward, we expect a gradual recovery in the collection business (led by higher origination business and higher...

The spread of Covid-19 has led to lockdowns in many countries globally and could have adverse economic implications. In addition, the recent fall in crude prices could also have an adverse impact of fiscal health of oil producing countries. As a result, IT companies, which have considerable exposure to verticals such as oil, energy & utilities; banking & capital markets; manufacturing and travel & transport could see an adverse impact from the ongoing crisis. Companies like Wipro, Infosys in large cap and MindTree, NIIT Tech, Sonata software, Cyient, Accelya Solutions among...

Firstsource reported a strong quarter with operating revenue witnessing growth of 7.5% QoQ. Growth was driven by the mortgage business (19% of revenue, 34.4% QoQ growth) and collections business (10% of revenue, 4.5% growth). Top customer (19.5% of revenue) also witnessed healthy revival in growth with 5.9% sequential growth after consistent pressure in last few quarters. As per the management, some amount of stability has started to come in the top client with ramp up in smaller projects within the client. Going forward, the management cited strong seasonality to play in...

Growth to be driven by collection, mortgage & digital Growth in the quarter was led by US mortgage business and momentum in some large clients in BFSI. As indicated by the management, growth visibility pertains to at least next two quarters in the mortgage business. In addition to this, BFSI, collection business and healthcare provider are expected to be one of the main drivers of growth going into FY20E. Accelerating digital revenues (~10.5% of revenue in Q1FY20 vs. 9% in FY19) and the company's internal target of reaching 13-15% of revenues in FY20E...

EBITDA margins declined 10 bps QoQ to 13.8% (vs. our estimate 14.6%) mainly on account of higher other expenses (up 9.1% QoQ) Reported PAT rose 5.7% QoQ to | 98.1 crore mainly on the back of lower tax rate (11.4% as percentage of PBT vs. 14.4% in Q2FY19) In-sourcing by top client, payer ramp down to impact FY19E topline Rupee revenues grew 3.2% QoQ but were below our expectations. This was mainly due to continuous headwinds in healthcare payer business impacting top 2-5 client growth (declined 5.7% QoQ). Further, revenue...

Revenues from operations grew 3.9% QoQ to | 954.7 crore (above our 2.3% de-growth and | 897.5 crore estimate) mainly led by rupee depreciation and higher growth in non-top five clients. Geographically, the US reported healthy 6.1% QoQ growth while vertically BFSI led growth & reported 6.9% QoQ growth The EBITDA margin remained flat QoQ at 13.9% mainly led by higher...

ICICI Securities Ltd | Retail Equity Research Revenues from operations grew 2.4% QoQ to | 919.1 crore, above our 1.4% de-growth and | 885.1 crore estimate. Revenues in constant currency grew 1.1% sequentially At 13.9%, EBITDA margins contracted ~80 bps QoQ, above our 13.5% and 130 bps decline estimate. The better-than-expected...

ICICI Securities Ltd | Retail Equity Research Revenues from operations grew 1.1% QoQ to | 897.3 crore and were below our 4.9% growth and | 930.4 crore estimate At 14.8%, EBITDA margins expanded 170 bps QoQ and were way above our 13.5% and 40 bps expansion estimate. Healthy margin expansion took place on account of lower-than-expected employee expenses (67.2% as a percentage of revenue vs. 68% expectation) and lower other expenses (down 2.7% QoQ)...

ICICI Securities Ltd | Retail Equity Research Revenues from operations grew 1.6% QoQ to | 887.2 crore and was above our 1% de-growth and | 864.4 crore estimate At 13.1%, EBITDA margins expanded 50 bps QoQ and was above our 12.8% and 20 bps expansion estimate. Margin expansion came...

Revenues from operations declined marginally by 0.6% QoQ to | 872.9 crore and was above our | 849.8 crore estimate At 12.6%, EBITDA margins expanded 110 bps QoQ and were in line with our 12.5% and 100 bps expansion estimate. Margin expansion...

(FSL) are not strictly comparable on QoQ basis as the company divested some of its domestic businesses during Q1FY2018. During Q2FY18, FSL reported another quarter of better-thanexpected operating performance against our modest estimates for Q2FY2018. Operating profit margin (OPM) improved by 110BPS QoQ (ahead of our estimates) despite Rs 3.5 crore (one-off) shutdown costs relating to domestic...

ICICI Securities Ltd | Retail Equity Research Firstsource's results were largely in line with our expectations. Revenues from operations declined 1.6% QoQ to | 877.7 crore, lower than our flat growth and | 892.3 crore estimate At 11.5%, EBITDA margins expanded 40 bps QoQ and were above...

Soften Operating Performance Due to Macro Uncertainties: Flat revenue growth; Margins drop by 101 bps QoQ - FSL recorded revenue of Rs. 8923 Mn in Q4FY17 with an increase of 0.8% QoQ, EBITDA in Q4FY17 islower by 7.6% QoQ at Rs.990 Mn which was at Rs. 1072 Mn in Q3FY17 and the margins dropped to 11.1% which is down by 101 bps QoQ and 222 bps YoY. In FY17, the company recorded revenue of Rs. 35556 Mn which is up by 10.1% YoY. PAT stood at Rs. 2792 Mn for FY17 which is up by 5.2% YoY compared with FY16.

Q4FY17 revenue growth (up 1.4% QoQ in cc terms)was in line with estimates. Net margin was down 60 bps QoQ due to losses in mortgage business (~6% of revenue, losses was Rs 150 mn), absorption of ~1,000 employees in Sky deal,headwinds in domestic telecom business, and INR appreciation.

Firstsource's results were below our expectations largely due to lower-than-expected EBITDA margin estimates Revenues from operations increased 0.5% QoQ to | 864.4 crore lower than our | 878.1 crore and 2.1% QoQ growth estimate...