- 31 Jul 2024
- ICICI Securities
FIRSTSOURCE SOLUTIONS: STRONG QUARTER, POISED FOR A HEALTHY GROWTH AHEAD; TOP LINE GUIDANCE REVISED UPWARDS
News: Firstsource Solutions (FSL) reported a revenue of ₹1,783.87 cr, up 6.9% QoQ/16.8% YoY. In dollar terms it reported a revenue of US$ 215 mn, up 6.7% QoQ/15.4% YoY (6.5% QoQ/14.8% YoY in CC terms). Geography wise on a QoQ basis, growth was led by North America (68.2% of mix) which grew by 12.2% while Europe & MEA (31.8% of mix) and ROW (0% of mix) declined by 2.5% and 100% respectively. Vertical wise Healthcare (35.7% of mix), BFS (36.4% of mix) and CMT (22.3% of mix) reported growth of 16.1%, 4.4% & 1.1% QoQ respectively while Others (5.6% of mix) declined by 3.4% QoQ. It reported an EBIT margin of 11%, flat QoQ. PAT stood at ₹135.3 crore, up 1.3% QoQ/7.4% YoY.
Views: FSL recorded its highest ever quarterly revenues and witnessed broad based growth across verticals, barring the Others vertical while in the BFS vertical, elevated interest rates remain an overhang. FSL added 10 new logos & won 3 large deals during the quarter and ended the quarter with a robust exit deal pipeline which gives confidence that the growth momentum witnessed in Q1 would further continue well within FY25 as well. FSL for FY25, revised its revenue growth guidance to 11.5-13.5% in CC terms (vs 10-13% earlier) and maintained its EBIT margin guidance in the range of 11-12% for FY25 and expansion of 50-75 bps thereafter. The management reiterated its target to achieve US$ 1 billion exit run rate by Q4FY26.
Impact: Positive