Firstsource Solutions (FSL) Q4 11/12 earnings summary

Executive summary

• FY12 revenue from operations rose 9.7% YoY to ₹22,549.9m; profit after tax fell 55.2% to ₹620.3m amid higher personnel, finance and other costs.

• Reorganization around geographies and horizontal service lines delivered resource savings; new markets, contract wins and a Sri Lanka JV supported expansion.

• New business signed carried $160m total contract value, targeted for execution over three years.

Financial highlights

• Consolidated total income was ₹22,936.4m vs ₹20,759.1m; revenue from operations was ₹22,549.9m vs ₹20,552.8m.

• Operating EBITDA fell to ₹1,850.8m from ₹2,832.0m; operating EBIT was ₹958.2m vs ₹1,941.2m.

• Profit before tax declined 56.7% to ₹759.8m; profit after tax was ₹620.3m vs ₹1,385.1m and diluted EPS was ₹1.44 vs ₹2.91.

• Consolidated revenue grew 5.8% on a constant-currency basis; reported growth benefited from favorable currency movements.

Outlook and guidance

• NASSCOM forecast 11–14% industry growth for FY13; priorities included adding new clients and increasing share of existing-client business.

• Management expected new BFSI deal activity to pick up in the coming fiscal as clients re-engaged with BPO providers.

• Sri Lanka and Ireland launches, ongoing market exploration and new client wins were positioned as longer-term growth drivers.