Firstsource Solutions Ltd. share price target

management services across the customer lifecycle. Company offers a inclusive suite of business process management services through a widespread domain knowledge, internal competencies and strategic...

FSL's revenues during the quarter grew 6.8% QoQ led by continued momentum in top 2-5 (up 18% QoQ on top of 16% QoQ growth in Q3) and growth in BFSI and healthcare verticals. Top customer revenues...

Modest revenue growth & margin slips by 13bps qoq: Firstsource reported revenue of Rs. 8178 mn in Q3FY16 which is up by 3.2% Q-o-Q and 8.9% Y-o-Y. EBITDA is Rs. 1005 Mn which was Rs. 984 Mn in Q2FY16 and the margins dropped to 12.3% which is by 13 bps Q-o-Q and 17 bps Y-o-Y. This sluggish movement and ramp down in margins mainly due to disruption in Chennai operations and business continuity cost. However, the growth momentum is expected to continue in Q4FY16E due to ISGN acquisition, demand in Healthcare and Telecom segments.

Healthcare vertical - Key Growth Driver: The healthcare industry is slowly morphing into a service industry, where customer experience is paramount. FSL Healthcare segment could experience bullish demand with an annual growth of 18-20% YoY. Both the payer and provider segments as a business, in FY15 Healthcare witnessed a revenue of Rs. 10,874 mn and in FY16E, we expect the revenue will ramp-up approximately to Rs. 12,000 mn.

Firstsource Solutions Limited (FSL) established in December 2001 by ICICI Bank, is a leading global provider of Business Process Management (BPM) services. After being acquired by RPG Group company CESC the new promoters initiated business restructuring which has started yielding results. With 29946 associates spread across 47 global delivery center, FSL serves clients in the Healthcare, Telecom & Media, BFSI industries from its delivery centers in India, USA, UK &Europe;, Philippines and Sri Lanka. With strong demand...