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Mumbai-headquartered Firstsource Solutions (FSL), an RP-Sanjiv Goenka group company into business process management services, is on the lookout for fresh acquisitions.
According to Sanjiv Goenka, Chairman, the company had cash reserves to the tune of nearly ₹180-190 crore and was also exploring the “possibility of inorganic growth”.
“Inorganic growth is possible,” he said during a media conference, but did not specify whether the acquisitions would be in data analytics or other verticals.
Post its acquisition by the Goenkas in October 2012, FSL made a “strategic investment” in Bengaluru-based analytics company, NanoBi.
According to him, the company will adopt a cautious approach about increasing its debt burden through acquisitions. Debt to equity ratio currently stands at 0.3:1.
FSL is also planning to shed further debt through refinancing and prepaying loans. Around $45 million (₹270 crore) is being repaid every year by the company.
Telecom and media account for nearly 43 per cent of its revenues with healthcare and banking, financial services and insurance (BFSI) is account for 36 per cent and 21 per cent, respectively.
Financial results On a consolidated basis, FSL reported a net profit of ₹62 crore, up 5 per cent, for the fourth quarter ended March 31, 2015 against ₹ 59 crore in the year-ago period. Total income from operations, during the quarter, declined by a little over 5 per cent to ₹754 crore against ₹796 crore in the year-ago period.
On a consolidated basis, the company reported an over 21 per cent growth in net profit for the full fiscal (FY-15) to ₹234 crore against ₹193 crore.
Total income, for FY-15, stood at ₹3,035 crore, a decline of around 2.3 per cent compared with ₹3,106 core last fiscal.
According to Goenka, the “weak top-line growth” is mainly on account of the company weeding out loss-making accounts. “The focus is on the bottom-line, where we have witnessed a strong (bottom-line) growth,” he said.
According to him, cost optimisation, prepayment of loans and weeding out loss-making accounts have led to improved profitability. Operating margins are likely to improve by another 100 basis points in FY-16.
The FSL stock closed at ₹31.75, down by 1.70 per cent on the BSE on Tuesday.
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