Firstsource profit soars 61%

CORPORATE SCORECARD

Following a successful listing, Firstsource Solutions' net profit for the quarter ended March 31, 2007, stood at Rs 34.9 crore "" a growth of 60.7 per cent from Rs 21.7 crore registered for the corresponding quarter last year.

The company's revenue stood at Rs 274.70 crore for the current quarter of the financial year 2006-07 "" an increase of 70.6 per cent as compared with Rs 161 crore for the corresponding quarter last year.

The company's sequential net profit increased by 15.6 per cent from Rs 30.2 crore in the quarter ended December 31, 2006, and revenues grew by 27.9 per cent. The company's operating margin grew 30 per cent from Rs 42.48 crore to Rs 55.2 crore.

For the full year, the company's net profit grew by 294.2 per cent and touched Rs 97.25 crore from Rs 24.67 crore in the last financial year.

The net profit, as a percentage of the total income, grew from 4.5 per cent to 11.6 per cent during 2006-07. Its revenues for the year stood at Rs 829.76 crore, a growth of 51.2 per cent from Rs 548.75 registered last year.

In its guidance for 2007-08, the company expects its revenues to grow by around 50 per cent. For the next few quarters, the company expects the net profit to grow in the range of 11-13 per cent. The company plans to focus on expanding its domestic operations along with a focus on entering the European markets.

Ananda Mukerji, MD & CEO, said, "It's been a year of all-round achievement. Considerable progress was made in expanding our global delivery footprint with new centres being set up in the US, the UK and Argentina. We also deepened our capabilities in the healthcare vertical and entered the domestic market with a significant contract."

And last but not the least was Firstsource's listing on the Indian stock exchanges and the beginning of our relationship with global and Indian investors."

The company's revenues from the telecom and media segment increased to 33.9 per cent this year from 25 per cent last year, and healthcare contributed 9.2 per cent.

The company's revenues from the BFSI segment fell to 51.8 per cent from 63 per cent last year. Similarly revenues from the US fell marginally to 47.3 per cent from 49.4 per cent last year.

However, revenues from the UK increased marginally to 48.7 per cent from 48 per cent. The year also saw Firstsource's entry to serve the domestic market. Its revenues from the domestic market increased to 3.8 per cent from 2.5 per cent.

The company added 22 clients for the year 2006-07, thus bringing the total number of active clients to 76, including three of the five largest US banks. For the quarter, it added two clients. The contribution from its top customers dropped to 14.5 per cent from 16 per cent y-o-y.

The top five customers contributed 51.4 per cent to the revenues in 2006-07. Its revenues from existing business increased to 94.2 per cent from 87.3 per cent in the previous financial year.

Keeping with the industry standards, Firstsource is planning to increase wages by 8-10 per cent. The company has 14,396 employees as on March 31, 2007. It added 6,046 employees for the full year with 3,697 being added in the last quarter.

The annual attrition rate stood at 42.2 per cent. In order to manage attrition rates, the company is looking at moving away from high attrition metros like Mumbai and Bangalore to tier-II and tier-III cities.