Firstsource Solutions Ltd. share price target

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...

Soften Operating Performance Due to Macro Environment Headwinds: Muted revenue growth & margins declined by 60bps: FSL reported revenue ofRs. 8854 mn in Q3FY17 which is up by 0.1% QoQ and 8.2% YoY. EBITDA in Q3FY17 is lower by 4.8% QoQ at Rs.1072 Mn which was at Rs. 1126 Mn in Q2FY17 and the margins dropped to 12.1% which is down by 62 bps QoQ and 27 bps YoY. Thissluggish movement and ramp down in margins mainly due to currency headwinds, weakness in mortgage business, and lower volumes from two of the company's telecom clients.

ICICI Securities Ltd | Retail Equity Research Firstsource's results were way above our expectation on all fronts with revenue, margins and PAT above our estimates Revenues from operations grew 0.3% QoQ to | 860.1 crore above our 3% QoQ de-growth and | 831.5 crore estimate. Constant currency revenues grew 2.1% QoQ and 13.9% YoY...

Strong Traction Continues in ISGN; Debt Repayment is in Line: Revenue declined by 1% QoQ impacted by GBP depreciation: In Q2FY17,FSL recorded revenue at Rs. 8844 Mn compared to Rs.8935 Mn in Q1FY17which is a de-growth of 1.0% QoQ. This is due to GBP depreciation; however the outstanding performance of ISGN business balanced the revenue loss. EBITDAmargins at 12.7% declined by ~ 60bps QoQ.

ICICI Securities Ltd | Retail Equity Research Firstsource reported decent Q2FY17 earnings where the operating performance was better than our expectations although the bottomline was below estimates due to a higher tax rate Revenues from operations declined 1% QoQ to | 884.4 crore below...

Firstsource Solutions is a leading global provider of customized Business Process Management (BPM) services to the Healthcare, Telecom, Media and Banking & Financial Services industries. It has operations in India, Philippines, Sri Lanka, UK and US. In Q1FY17, it reported revenue growth of 20.6% to Rs. 894Cr against Rs. 741Cr on yearly basis. Net profit surged 38.8% to Rs. 73.4Cr compared to Rs. 52.9Cr in the same quarter last year.

ICICI Securities Ltd | Retail Equity Research Firstsource reported decent Q1FY17 earnings wherein the operating performance was better than our expectations although the bottomline was lower due to higher tax rate Revenues from operations grew 2.3% QoQ to | 893.5 crore ahead of...

The Company serves organizations involved in Banking and Financial Services, Insurance, Healthcare, Telecommunications & Media and Publishing sectors. First Source assimilated best-of-breed processes, developed intellectual Property, adopted cutting edge technology, ensured on time delivery and invested in quality services to confirm maximum customer satisfaction. In process they help their clients to reduce operational costs, record process improvements and more importantly, focus on their core competence. It is 7th among top 10...