Dynamic Levels Firstsource Solutions · Firstsource Solutions Limited ... V K Sharma Ind.& Non Exe.Director ... communication such as voice, email etc

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Report By: Vikash Kandoi – [email protected]

mailto:[email protected]

Page 2 Source: Company, www.dynamiclevels.com

Firstsource Solutions Limited

Company Overview and Stock price ……………………………………….……3

Product Overview……………………………………………………………….….…..4

Clients…..…………….…………………………………………………………………….9

Industry Outlook………………………………………....……….………….….…..10

Digital India………………………………..…………….………….….………………11

Highlight for FY 2015-16……………………………………………………………12

Company Financials………………………………………………………………….14

Peer Comparison & Ratios….………………………………………….……..…..17

Shareholding Pattern…………………………………………..……………....…. 18

Investment Rationale………………………………………...………….......…....19

Disclaimer………………………………………………………………………………..20


Company’s Overview and Stock Price

Firstsource delivers innovative, value-added business process 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 alliances backed by leading-edge technologies. They focus on

Telecommunications & Media,

Banking & Financial Services,

Insurance,

Healthcare

Publishing verticals have enabled them to extend business benefits beyond cost arbitrage. Their endeavor is to deliver value-added services in Customer Management, Data Processing and Collections to build long-term partnerships with their clients and end-customers. They leverage well-tuned processes and innovative Intellectual Property-based products to simplify complex business processes. It’s a commitment that is reflected in their value proposition.

Product Overview

First Customer Intelligence

Company Overview

EXCHANGE SYMBOL FSL

Current Price * (Rs.) 38.30

Face Value (Rs.) 10.00

52 Week High (Rs.) (01-Dec-15) 45.90

52 Week Low (Rs.) (24-Aug-15) 24.20

Life Time high (Rs.) (15-May-07) 93.20

Life Time low (Rs.) (29-Dec-11) 5.55

Average Daily Movement [ADM] 1.48

Average Volume [20 days] 2819575

1 Month Return (%) 7.13

P/E Ratio (x) 9.74

Book Value 31.10

Market Cap (Cr) 2583.01

% of Promoter holding pledged 0.00

COMPANY PROFILE OF FSL, NSE, INDIA

Date of Incorporation 6-Dec-01

Date of Listing 22-Feb-07

Management

Name Designation

Sanjiv Goenka Chairman

Y H Malegam Ind.& Non Exe.Director

V K Sharma Ind.& Non Exe.Director

Charles Miller Smith Ind.& Non Exe.Director

Pradip Roy Ind.& Non Exe.Director

Donald W Layden Jr. Ind.& Non Exe.Director

Grace Koshie Independent Women Director

Rajesh Subramaniam Managing Director & CEO

Shashwat Goenka Non Exe.Non Ind.Director

Subrata Talukdar Non Exe.Non Ind.Director

Pradip Kumar Khaitan Non Exe.Non Ind.Director

Registered Office Address

5th Floor, Paradigm `B' Wing,Mindspace, Link Road, Malad

(West),400064,Mumbai,Maharashtra,India

Website

http://www.firstsource.com

Below is a weekly chart of Firstsource Solution which shows

that stock has gained momentum from Rs. 28 levels and

recently made high of Rs. 43.35. Stock has corrected from Rs.

43.35 and has come to a support of Rs. 38.50.


First Chat

First Smartomation

First Resolve

First WF Suite

First Customer Intelligence As multi-communication channels like web, mobile and social media evolve, enterprises need to integrate these with the traditional customer communication channels and automate the data capture & analysis in order to deliver high-impact customer intelligence. First Customer Intelligence (FCI) helps clients in reducing cost to serve and customer effort, improving customer experience and increasing revenues by providing actionable insights across products, processes, channels, web strategy and agent performance. These are drawn from an in-depth, real-time analysis of customer interactions on voice and non-voice customer service channels. Powered by Firstsource’s Customer Insight Framework, FCI measures customer sentiment, emotions and behavior across multiple communication channels at an early stage in the interaction. These findings are further strengthened by performing competition analysis to provide actionable insights. FCI can also be deployed for tests campaigns, product launches, market hypothesis as well as customer profiling through trigger-based measurement processes. FCI has inbuilt algorithms and can be integrated with clients’ customer relationship management (CRM) systems.

First Chat First Chat - Adding a human touch to the online customer experience First Chat is an online customer engagement product from Firstsource that employs an effective approach to improve the customer experience. First Chat enables real-time, person-to-person communication through live chat, adding a human touch to the web experience. It helps in turning online visitors into customers and empowers customers to self-serve efficiently. First Chat uses intelligent business rules to deliver proactive chat invitations at an appropriate time to engage customers online. It has multi-media compatibility that combines text, graphics and video to resolve customer queries efficiently. First Chat delivers cross-platform chats on desktops, mobiles and tablets, for maximum flexibility. First Chat can be deployed across online sales, customer service, technical support, account management, collections, saves and retentions with significant return on investment. It delivers significant benefits for the enterprise while enhancing customer experience:

The name “First Customer Intelligence” and

tagline “Actionable Insights from Customer

Interactions” has been applied for before

the Trade Mark Registry, in India.


Reduced Cost-to-Serve - Considerable reduction in the cost of serving customers as compared to other channels of communication such as voice, email etc.

Superior Customer Experience - Facilitates better customer management due to effective online customer engagement. CSAT scores up by 5-10% over voice and by 15-20% on email

Incremental Sales - 70-90% increase in online sales and up sell/cross sell across different clients

Real-time Customer Engagement - Connects with customers in real-time, minimizing loss of business due to abandoned transactions

Quick Resolution - Enables faster resolution of technical issues and enhances First Contact Resolution by 5-10% over voice and 20%

Firstsource has successfully implemented First Chat, as a part of its customer management strategy for clients across industry verticals and delivered exemplary results. A snapshot of the KPIs delivered for clients in Telecom, Media and Banking and Financial Services demonstrates the efficacy of First Chat as a customer service channel. Telecommunications FCR – 82% Media & Entertainment CSAT Scores > 87% NPS Scores > + 40 Banking and Financial Services CSAT Scores > 87% Sales Conversion – 26.5% Given the capabilities Firstsource has built around First Chat, the potential to improve service delivery and enhance customer experience is enormous. For a customer-focused enterprise, the possibilities of increasing online conversions, delighting customers and reducing the cost-to-serve are endless.


First Smartomation Contact center agents often need to access data or information associated with multiple products and services from disparate systems, sources, knowledge bases and databases which don’t necessarily talk to each other. This leads to a complex customer management scenario where a contact center agent needs to search across different systems for the required information. The agent has to toggle between screens and manually enter data, which makes it error-prone. It leads to longer First Call Resolution (FCR) and Average

Handling Time (AHT). As a result, agent productivity is hampered creating a less-than-perfect customer experience. Firstsource addresses this challenge by using a proprietary process automation tool called First Smartomation.

First Smartomation uses non-invasive technology to integrate diverse applications on their native platforms. It then provides a unified, user-friendly interface to the agent that simplifies the process. First Smartomation boosts agent productivity, increases accuracy and enhances customer experience. First Smartomation uses the following intuitive framework to increase process efficiency and productivity:

Business benefits of First Smartomation include:

Increased cost efficiencies by 10-15% for voice; 25-30% for

back-office

Enhanced customer experience due to lowered AHT and

improved FCR

Improved agent productivity and optimum use of resources

Increased process compliance

Increased accuracy and better quality of output

First Smartomation delivered the

following metrics for a US Telecom Major

200% Increase in Productivity

67% Cost Reduction

100% Data Accuracy

30% Reduction in Training Time


First Resolve – The Complete Remediation Solution

Firstsource has developed First Resolve – the complete remediation solution for FCA reportable complaints. Based at Middlesbrough Center of Excellence, their expert case handlers provide inbound and outbound case review and remediation services to leading UK financial services companies.

Features:

Full lifecycle of operational process for complaints handling

Rapid implementation and response team

Turnkey case management technology platform

Risk-based quality monitoring framework

Bespoke management reporting and analysis solutions

Root cause analysis system for process improvement & complaint reduction

FCA regulatory compliance

Flexible, outcome-based commercial model

Case management Center of Excellence

Agile Resources Benefits:

Upto 100% remediation accuracy

Managed 90% of complaints within the first 10 working days

100% adherence to acknowledgement & final response time scales

Flexible workforce across complete range of customer complaints

Compliance with FCA regulations and timelines

FCI analytics provide insights into consumer behavior and act as an early warning system

A Robust Complaints Management Solution First Resolve delivers a proven claims handling methodology and

includes a portfolio of claims management services covering the

complete range of consumer claims including:

PPI – reactive & proactive

Card Protection Plan (CPP)

Mobile phone insurance

Identity Protection Insurance (IPA)

Packaged bank accounts

Interest only mortgages

Exec office complaint handling

Financial ombudsman referral and resolution

General claims management


First WF Suite

One of the biggest challenges for organizations and their contact centers is managing workforce costs, which account for 55-60 per cent of their operational expenditure. Effectively managing workforce centric processes like scheduling, evaluation and training can help in cost control and agent performance. First WF Suite - The Workforce Management Product Suite from Firstsource helps in devising the right strategies for contact centers and building robust WFM capabilities. First WF Suite also enables an end-to-end Workforce Management practice, apart from providing consulting services to improve efficiency and contain costs. Consulting Services: Involves inspecting the client's existing WFM practice, identifying the problems impacting the performance of the business from a Workforce Management standpoint and developing a WFM strategy to improve efficiency and reduce operational costs. Managed Services: Firstsource helps organizations to manage their end-to-end WFM practice such as forecasting, resource planning, staffing and scheduling, real-time adherence, operations analytics, process design and re-engineering. Capability Development: Firstsource WFM Academy provides effective, coherent and focused training in the field of Workforce Management, around the areas of forecasting, planning and reporting. Further it helps clients in identifying the right tools, provides training resources on advanced tools and helps in implementing processes.

Firstsource offers First WF Suite as a customized product offering comprising:

Consulting

Managed Services

WFM Capability Development


Clients

FSL Ltd is a leading business process management company, providing

customer-centric business process services. Their network of delivery

centres encompasses

India,

Philippines,

Sri Lanka

UK

US

FSL leverage their ‘Right-shore’ delivery model to serve organisations

in the

Banking and Financial Services

Insurance,

Healthcare,

Telecommunications & Media,

Publishing sectors

They assimilated best-of-breed processes, developed intellectual

property, adopted cuttingedge technology, ensured on-time delivery

and invested in quality services to confirm maximum customer

satisfaction. This helped their clients to reduce operational costs,

record process improvements and more importantly, focus on their

core competence.

FSL Limited Top Clients

Healthcare

5 of the top 10 health insurance/managed care companies in

the US

700+ hospitals in the US

Telecom and Media

2 of the top 10 US telecom companies

1 of the top 3 mobile service providers in the UK

Largest pay TV operator in the UK Largest pay TV operator in

Australia

3 of the Top 5 mobile service providers in India

Largest Telecom Company in Sri Lanka

One of the world’s largest Media & Entertainment

conglomerates

UK’s largest News & Broadcasting company

Banking, Financial Services and

Insurance (BFSI)

6 of the top 10 credit card

issuers in the US

2 of the leading consumer

finance companies in the US

Largest retail bank and

mortgage lender in the UK

1 of the top 3 motor insurers

in the UK

A leading Irish Bank

1 of the top 5 private banks

of India and a leading private

life insurer

1 of the UK’s statutory

compensation provider

A leading financial institution

in Northern Europe


Industry Outlook

Introduction

Market Size and Position India is the world's largest sourcing destination for the information technology (IT) industry, accounting for approximately 67 per cent of the US$ 124-130 billion market. The industry employs about 10 million workforces. More importantly, the industry has led the economic transformation of the country and altered the perception of India in the global economy. Cost effective India's cost competitiveness in providing IT services, which is approximately 3-4 times cheaper than the US, continues to be the mainstay of its Unique Selling Proposition (USP) in the global sourcing market. However, India is also gaining prominence in terms of intellectual capital with several global IT firms setting up their innovation centres in India. Creating Demand The IT industry has also created significant demand in the Indian education sector, especially for engineering and computer science. The Indian IT and ITeS industry is divided into four major segments – IT services, Business Process Management (BPM), software products and engineering services, and hardware.

Valuation till 2015-16

The IT-BPM sector which is currently valued at US$ 143 billion is

expected to grow at a Compound Annual Growth Rate (CAGR) of 8.3

per cent year-on-year to US$ 143 billion for 2015-16. The sector is

expected to contribute 9.5 per cent of India’s Gross Domestic Product

(GDP) and more than 45 per cent in total services export in 2015-16.

Expectation

The Indian IT sector is expected soft but steady growth in FY 2017 in

constant currency terms. The sector is also expected triple its current

annual revenue to reach US$ 350 billion by FY 2025, as per National

Association of Software and Services Companies (NASSCOM). India, the

fourth largest base for new businesses in the world and home to over

3,100 tech start-ups, is set to increase its base to 11,500 tech start-ups

by 2020, as per a report by NASSCOM and Zinnov Management

Consulting Pvt Ltd.

India’s internet economy is expected to

touch Rs 10 trillion (US$ 146.72 billion)

by 2018, accounting for 5 per cent of the

country’s GDP, according to a report by

the Boston Consulting Group (BCG) and

Internet and Mobile Association of India

(IAMAI) and smartphones grew to 160

million.

Investments Indian IT's core competencies and

strengths have attracted significant

investments from major countries. The

computer software and hardware sector

in India attracted cumulative Foreign

Direct Investment (FDI) inflows worth

US$ 20.42 billion between April 2000

and December 2015, according to data

released by the Department of Industrial

Policy and Promotion (DIPP).

Indian start-ups are expected to receive

funding worth US$ 5 billion by the end of

2015, a 125 per cent increase in a year,

according to a report by IT Industry

association NASSCOM.

Having proven its capabilities in

delivering both on-shore and off-shore

services to global clients, emerging

technologies now offer an entire new

gamut of opportunities for top IT firms in

India. Social, Mobility, Analytics and

Cloud (SMAC) are collectively expected

to offer a US$ 1 trillion opportunity.

Cloud represents the largest opportunity

under SMAC, increasing at a CAGR of

approximately 30 per cent to around

US$ 650-700 billion by 2020.


Digital India

The Digital India program is centred on three key vision areas:

Digital Infrastructure as a Core Utility to Every Citizen

Governance and Services on Demand

Digital Empowerment of Citizens

Digital Infrastructure as a Utility to Every Citizen

Availability of high speed internet as a core utility for delivery

of services to citizens

Cradle to grave digital identity that is unique, lifelong, online

and authenticable to every citizen

Mobile phone & bank account enabling citizen participation in

digital & financial space

Easy access to a Common Service Centre

Shareable private space on a public cloud

Safe and secure cyber-space

Governance & Services on Demand

Seamlessly integrated services across departments or

jurisdictions

Availability of services in real time from online & mobile

platforms

All citizen entitlements to be portable and available on the

cloud

Digitally transformed services for improving ease of doing

business

Making financial transactions electronic & cashless

Leveraging Geospatial Information Systems (GIS) for decision

support systems & development

Digital Empowerment of Citizens

Universal digital literacy

Universally accessible digital resources

Availability of digital resources / services in Indian languages

Collaborative digital platforms for participative governance

Citizens not required to physically submit Govt. documents /

certificates


Highlights for FY2015-16

Acquisition:

Firstsource has entered into a Definitive Agreement with ISGN in

January 2016, a leading full service provider of mortgage technology

and services, to acquire its BPO division. This strategic acquisition helps

Firstsource penetrate into the growing US mortgage BPO market,

provides Firstsource with marquee customers, and offers significant

potential opportunities for cross-selling of services.

Business Wins:

FSL ltd signed a large transformational deal with one of UK’s

largest retail banks. The transformational nature of this deal

involves significant elements of process re-engineering and

automation.

FSL Ltd Signed a 3 year contract extension with giffgaff, the

Mobile network provider in UK. The contract signifies a

renewed commitment to providing excellent member

management services for the network provider.

FSL Ltd partnered with Synexus, world’s leading Site

Management Organisation (SMO) to enhance the patient

experience throughout the clinical trial process. This win marks

Firstsource’s entry into the UK’s healthcare industry.

Firstsource forayed into the E-commerce space in India with a

new contract win with one of the top e-commerce player.

Firstsource will provide Inbound Customer Service for this

client.

Partnerships:

Firstsource investment into Analytics in partnership with

NanoBi continues to strengthen its capabilities to provide

valuable insights to clients it serves.

Fisrtsource partnered with WorkFlex, the industry leader in

Intelligent Intraday AutomationTM for contact centers, to

boost intraday performance through real-time alerting.

Firstsource partnered with Ulster University – the second

largest university in UK - to give Firstsource employees an

opportunity to earn a degree in Customer Contact

Management. Awards and Accolades:


Won Outsource Contact Centre of the Year at the Welsh

Contact Centre Awards. The win recognizes Firstsource as a top

employer in the industry and reflects the unmatched career

development and training opportunities it offers its people.

Received the ‘Innovation in Outsourcing’ award for its

partnership with giffgaff at the National Outsourcing

Association’s (NOA) Awards 2015.

Won 2 awards at the UK Customer Experience

Awards 2015:

With NOW TV, the ‘Business Change or Transformation -

Transformation at the Heart’ category. NOW TV is an Online

Television service powered and owned by Sky.

The Silver Award with giffgaff in the ‘Technology and Telecoms

- Amazing Customer Experience’ category.

Awarded 4th Runner-up for its corporate film on Diversity &

Inclusion at the Learning & Organisation Development (L&OD)

2016 Corporate Film Awards

Credit Rating

CRISIL (A Standard & Poors Company) upgraded the company’s Short-

Term Rating from A2 to A2+ Stable and assigned the Long Term Rating

of A-

Instrument Category Earlier Rating Rating After Upgrade

Long Term CRISIL A- / Stable

Short Term CRISIL A2 CRISIL A2+

Corporate Credit Rating

CCR BBB+ Withdrawn (due to assignment of Long Term

Rating)

CARE has upgraded the company rating from CARE A- to CARE A (Long-term Bank Facilities) and from CARE A2+ to CARE A1 (Short-term Bank Facilities).

CARE has upgraded the company’s

commercial paper rating from CARE A2+

to CARE A1

Facilities / Instrument Earlier Rating Rating After Upgrade

Short-term Bank Facilities

CARE A2+ CARE A1

Long-term Bank Facilities

CARE A- CARE A


Company Financials

In Cr March-16 March-15 March-14 Growth

Annual Annual Annual FY15-FY16 FY14-FY15

Net Sales/Income from operations 3174.69 3003.38 3127.02 5.70% -3.95%

Other Operating Income 55.60 31.27 -21.15

Total Income From Operations 3230.29 3034.65 3105.88

Employees Cost 2172.17 2017.15 2129.41 7.69% -5.27%

Depreciation 66.20 72.18 75.70

Other Expenses 653.30 636.74 614.35

Total Expenditure 2891.67 2726.07 2819.45 6.07% -3.31%

Operating Profit 338.62 308.58 286.42 9.73% 7.74%

Other Income 9.44 6.52 2.00

P/L Before Int., Excpt. Items & Tax 348.06 315.10 288.43

Interest 52.44 71.09 85.15 -26.23% -16.51%

P/L Before Tax 295.62 244.02 203.28

Tax 30.22 9.54 10.09

PAT 265.41 234.48 193.19 13.19% 21.37%

Minority Interest -0.44 -0.16 -0.23

Net Profit/(Loss) For the Period 264.97 234.32 192.96 13.08% 21.43%

Equity Share Capital 673.32 666.29 659.74

Reserves 1751.77 1422.33 1431.69

EPS (Rs.) [After Extraordinary items] 3.96 3.53 2.93 12.18% 20.48%

Operating Profit Margin 10.67% 10.27%

Net Profit Margin 8.35% 7.80%

Income from Operations has shown significant jump from F15-FY16 comparing that to FY14-FY15.

Company has maintained its Operating profit margin in line with Nasscom expectation of 10%-11% steady growth.

Company’s Net Operating Profit margin has not shown any significant change in FY16 comparison with FY15.

Company’s interest cost has gone down drastically from Rs. 71.09 to Rs. 52.44 drop of 26.23% this is a good sign.


Particulars March, 31 March, 31

2016 2015

EQUITIES AND LIABILITIES

Shareholder's Fund

Share Capital 673.31 666.29

Reservs and Surplus 1751.77 1422.33

Total Shareholder's Fund 2425.08 2088.62

Share application money received under ESOP scheme - 0.02

Non Current liabilities

Long-term borrowings 426.97 414.30

Deferred tax liabilities, net 27.22 34.47

Long-term provision 16.13 17.75

Total Non-Current liabilities 470.32 466.52

Current liabilities

Short Term borrowings 152.53 316.03

Trade Payables 89.07 83.28

Other Current Liabilities 500.97 456.46

Short Term Provisions 27.28 13.98

Total Current Liabilities 769.85 869.75

Total- Equity and Liabilities 3667.22 3426.54

ASSETS

Non Current Assets

Goodwill on Consolidated 2469.24 2333.64

Fixed Assest

- Tangible Assets 89.19 77.07

-Intangible Assets 43.60 33.30

-Capital work-in -Progress 7.88 8.47

Non-current Investment 8.38 5.76

Long-term Loan and Advances 246.80 222.08

Other non -Current assets 14.41 2.70

Total Non-current assets 2878.77 2682.93

Current Assets

Current Investment

Trade receivable 76.77 67.61

Cash and Bank balance 304.08 288.95

Short-term loans and advances 68.91 80.23

Other Current Assets 66.22 43.96

Total Current assets 272.48 262.89

Total - Assets 3667.22 3426.54


Cash Flow of Firstsource Solutions in Rs. Cr.

Mar 15 14-Mar 13-Mar 12-Mar 11-Mar

12 mths 12 mths 12 mths 12 mths 12 mths

Net Profit/Loss Before Extraordinary Items And Tax 159.92 134.47 117.39 45.36 66.29

Net CashFlow From Operating Activities 50.58 -17.37 329.97 91.56 78.49

Net Cash Used In Investing Activities -50.56 0.39 598.42 712.04 27.94

Net Cash Used From Financing Activities -2.75 20.23 -970.17 -394.83 29.5

Adjustments on Amalgamation / Merger / Demerger / Others 0.00 0.00 1.18 0.00 0.00

Net Inc/Dec In Cash And Cash Equivalents -2.73 3.25 -40.61 408.77 135.92

Cash And Cash Equivalents Begin of Year 28.58 25.33 65.94 147.56 11.64

Cash And Cash Equivalents End Of Year 25.85 28.58 25.33 556.33 147.56

Date High Price Low Price Close Traded Qty Del Qty

21-Apr-16 38.10 36.30 37.65 46.31 22.03

22-Apr-16 38.30 36.60 37.45 17.27 8.63

25-Apr-16 38.40 36.55 36.95 10.76 5.88

26-Apr-16 40.90 37.25 38.85 97.25 37.76

27-Apr-16 40.90 38.90 40.70 48.13 22.10

28-Apr-16 41.35 39.50 39.70 21.67 11.24

29-Apr-16 41.15 39.50 40.95 23.62 13.00

2-May-16 41.95 40.55 41.05 28.24 14.85

3-May-16 42.00 40.60 40.80 19.72 9.12

4-May-16 41.20 39.90 40.00 12.50 7.12

5-May-16 40.75 39.85 40.30 9.51 3.82

6-May-16 40.75 39.80 40.30 12.22 7.44

9-May-16 42.90 40.55 42.30 39.94 19.16

10-May-16 43.35 42.05 42.70 26.02 12.04

11-May-16 42.50 41.10 41.85 19.61 10.70

12-May-16 42.70 39.70 40.05 63.39 22.24

13-May-16 40.70 39.20 39.40 23.78 12.40

16-May-16 39.75 38.35 38.95 12.72 6.01

17-May-16 39.35 37.45 37.60 21.04 11.04

18-May-16 37.75 36.50 37.05 16.85 8.34

19-May-16 39.20 36.90 38.40 24.99 11.81

20-May-16 39.00 37.65 38.30 17.89 8.79

Delivery position with volume is seen between Rs. 36 to Rs. 38 levels which suggest that stock has good support at

Rs.36.


Peer Comparison and Ratio

SL INSTRUMENT Price Avg. Volume Market Cap (Rs. in Cr)

1 FSL 38.30 2816444 2588

2 GEOMETRIC 212.75 313794 1385

3 KPIT 163.85 765478 3244

4 TANLA 37.45 290497 384

FSL has highest volume compare to its Peer Company and

highest market capitalization which provide good liquidity to

the stock and impact cost in minimal in trading.

SL INSTRUMENT P/E Ratio (X)

Debt Equity Ratio (X)

Int. Coverage Ratio (X)

1 FSL 9.78 0.35 5.45

2 GEOMETRIC 13.12 0.14 44.93

3 KPIT 11.50 0.34 13.84

4 TANLA 23.51 0.00 0.00

FSL has lowest PE ratio and debt equity ratio is very low. Industry PE ratio

for IT is at 18.69 (Source: NSE) therefore the stock is trading at almost half

of Industry PE.

SL INSTRUMENT % Pledged % FII Holding

1 FSL 0 8.5

2 GEOMETRIC 0 2.91

3 KPIT 15.96 22.39

4 TANLA 0 0

Foreign institutions are holding 8.5% with no

promoter pledge which is a good sign.

SL INSTRUMENT 1M 3M 6M 1Y Movt Post Budget

1 GEOMETRIC -7.90% 38.53% 25.03% 56.97% 47.74

2 KPIT 6.90% 31.87% -1.53% 49.18% 25.05

3 FSL 6.96% 25.49% -0.78% 22.29% 27.36

4 TANLA -7.34% 23.69% 0.53% 112.04% 36.15

FSL has given a consistent performance for its share holders. Post Budget

stock has surged 27.36%.


Shareholding Pattern

Shareholding Pattern 16-Mar 15-Dec 15-Sep 15-Jun 15-Mar

Promoter and Promoter Group (%) 55.54 55.59 55.79 56.08 56.13

Indian 55.54 55.59 55.79 56.08 56.13

Foreign Nil Nil Nil Nil Nil

Institutions (%) 16.29 15.98 16.44 16.64 15.85

FII 8.96 8.50 9.10 9.84 9.13

DII 2.47 2.60 2.50 1.94 1.86

Financial Institution 4.86 4.88 4.84 4.86 4.86

Non Institutions (%) 28.16 28.43 27.77 27.28 28.03

Bodies Corporate Nil Nil 3.24 3.05 3.28

Others 28.43 28.43 24.53 24.23 24.75

Custodians Nil Nil Nil Nil Nil

Total no. of shares (cr.) 67.33 67.27 67.03 66.68 66.63

Ratio Analysis

Current Ratio (x) 1.49

Quick Ratio (x) 1.49

Dividend Yield (%) 0

Interest Coverage Ratio (x) 5.45

Debt Equity Ratio (x) 0.35

Return On Asset (%) 25.86

Return On Equity (%) 11.21

Sector Wise Fiscal Year in Crs.

2015 2014 2013

Healthcare 1476.21 1016.48 900.72

Telecommunication & Media 1277.48 1393.17 1250.38

BFSI 644.25 707.21 673.62

Others 5.43 10.15 19.28

Total 3003.37 3127.02 2844.01

Region Wise Fiscal Year in Crs.

2015 2014 2013

North America (USA & Canada) 1479.54 1458.37 1313.34

UK 1077.83 1113.50 972.45

India 246.20 278.42 299.31

Rest of the world 199.79 276.72 258.90

Total 3003.37 3127.02 2844.01


Investment Rationale

Financial Highlights for Year ended March 2016:

First source limited revenues have jumped by 6.4% over corresponding period of the previous year at Rs 3230.30 crores for the year ended March 2016.

Operating EBIT is up by 9.7% over corresponding period of the previous year of Rs 3,38.60 crores for the year ended March 2016.

Profit after tax up by 13.1% over corresponding period of the previous year Rs 265.00 crores for the year ended March 2016.

As of March 31, 2016, Firstsource Solutions derived 54% revenues from the US, 37% from UK and 8% from Rest of World, including India.

Business segments - Media, Healthcare and BFSI to aid growth traction. Pipeline is robust

Company is Confident about achieving growth in FY17. Q1 to demonstrate y-o-y growth

ISGN deal expected to close in the coming weeks. (ISGN's is a US-based mortgage service provider FSL joined hand to expand into higher-margin services)

US Elections and Brexit outcome keenly watched by the company for future growth.

Domestic business is expected to continues to face headwinds

Continue to build differentiation in offerings through productized services with emphasis to augment capability in areas of i) RCM, Automation ii) Analytics, Digital

Their recent wins emphasize their significant progress in these areas.

Debt repayment continues as per plan (Firstsource Solutions is confident of repaying $180m debt over next 4yrs)

We recommend BUY in Firstsource Solutions Ltd @ 38 with the target of 45

https://www.dynamiclevels.com/en/fsl-share-price-forecast


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