FirstSource Solutions Ltd
BPO/KPO
FV – Rs 10; 52wks H/L – 48.85/25; TTQ – 14.58 Lakhs; CMP (June 24, 2016) – Rs 44.15;

Market Cap – Rs 2979.3Crs

Financials and Valuations for FY16 (Amt in Rs Crs unless specified)

Valuation Parameters 

1. EV/EBITDA: 8.24
2. EV/Share: Rs 50
3. EV/Sale: 1.03
4. Market Cap/ Sale: 0.92
5. Debt to Equity: 0.18

Recent Updates

• In June 2016, Board of Directors of the Company approved grant of 3000000 stock options (each option exercisable into one equity share) to the eligible employees of the Company and its subsidiaries at an exercise price of Rs. 40.90 per share under Employee Stock Option Scheme of the Company.
• The company’s US Subsidiary, FG US completed acquisition of ISGN’s Business Process Outsourcing Division in May 2016.
• FY16’s growth was lower than guidance due to Approx. 200 bps due to decline in domestic business and a further 200 bps due to challenges faced in US telecom client business.

Block Deals

IPO

• The company came out with its IPO in the year 2007 @Rs 64 a share and was promoted by the ICICI Group.
• The IPO size was Rs 443 Crs with a fresh issue of 60 million shares and an offer for sale of 9.3 million shares by Promoter, ICICI Group.
• The IPO was oversubscribed 40 times and got listed at Rs 90.

The Company’s share price after making a high of Rs 93 in 2007 made a. All time low of Rs 6 in 2012 and has now climbed to Rs 44 in June 2016.

Overview

• Firstsource Solutions Limited is a business process management company.
• The Company provides business process outsourcing (BPO)/business process management (BPM) services to the healthcare, telecommunications and media, and banking, financial services and insurance (BFSI) industries.
• The Company has two segments: Banking, Financial Services and Insurance and Non-Banking, Financial Services and Insurance.
• The Company’s product portfolio includes First Customer Intelligence, First Chat, First Smartomation, First Resolve and First WF Suite.
• The Company’s flagship product First Customer Intelligence is a customer interaction analytics solution. First Chat is an online customer engagement product.
• First Smartomation is a process automation solution. First Resolve is a complaints management solution. First WF Suite is a workforce management solution, which consists of consulting services, managed services and WFM capability development.

Management

• Mr Sanjiv  Goenka is the Chairman
• Mr Rajesh Subramaniam is the MD & CEO

The Equity Capital is @Rs 67.33 Crs consisting of 673314912 Equity Shares of FV Rs 10 currently held

None of the promoter’s holding is pledged

Consolidated Financial Trends ~ Amt in Rs Crs

• In FY15, Company issued 6556583 equity shares of the face value of Rs 10 each on the exercise of stock options under Firstsource Solutions Employee Stock Option Scheme, 2002 (ESOS 2002) and Firstsource Solutions Employee Stock Option Scheme, 2003 (ESOS 2003). Thus, the outstanding, issued, subscribed and paid up capital of the Company increased from 659734876 shares to 666291459 shares of Rs 10 each aggregating to Rs 666.29 Ccrs.
• In FY14, Company issued 2061125 equity shares of the face value of Rs 10 each on the exercise of stock options under Firstsource Solutions Employee Stock Option Scheme, 2003. Consequently, the outstanding, issued, subscribed and paid up capital of the Company increased from 657673751 shares to 659734876 shares of Rs 10 each aggregating to Rs 659.74 Crs.
• In FY13, after the issue of 226897444 equity shares to Spen Liq Private Limited on preferential allotment basis, the issued, subscribed and paid-up equity share capital of the Company increased from 430776307 shares to 657673751 shares of Rs 10 each aggregating to Rs 657.67 Crs.
• In FY12, the Company issued 138125 equity shares of the face value of Rs 10 each on the exercise of stock options under the Employee Stock Option Schemes of the Company. Consequently, the outstanding, issued, subscribed and paid-up equity share capital of the Company increased from 430638182 shares to 430776307 shares of Rs 10 each.