Business process outsourcing firm Firstsource, reported a drop of 43.9 per cent in its net profit at Rs 115.6 crore for the third quarter ended December 31, 2008 as compared to Rs 206 crore in the corresponding quarter ended
last year.
Revenue for the quarter under review at Rs 444.2 crore, up 18.9 per cent from Rs 373.7 crore.
Sequentially too, the company’s net profit dipped 59 per cent from Rs 28.28 crore--but revenue grew 4.5 per cent from Rs 424.98 crore.
The net profit of the company was impacted due to start up and one time costs associated with large ramps of nearly 3,000 employees and commissioning of four new centres to service the growing domestic business as well as ramp up in the US healthcare business. This also impacted the operating EBIT margins, which was down 42 per cent y-o-y.
The management of the company with regards to the guidance said that while it will maintain the revenue guidance of 21 per cent (which was reduced in November from 33-38 per cent) in dollar terms and 32 per cent in rupees, it will may miss its operating margins forecast of 10-10.5 per cent.
“The impact of the US recession is not only continuing to affect business in BFSI, but some impact is also starting to be felt by sectors earlier unaffected like Healthcare. We are, however, seeing positive momentum in the telecom vertical with large customers projecting increases in work for the next year,” said Ananda Mukerji, MD & CEO, Firstsource.
The collections business, which accounts for 11 per cent of the total revenue, continues to be under pressure. However, the telecom and media sector that account for over 30 per cent of its revenue is starting to look up with firms increasing business to the company.
For the third quarter, the company had a net hiring of 2,944 compared to 1,223 addition done last quarter.