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Firstsource Solutions, a BPO player, has been facing a turbulent 12-18 months as it grapples with anaemic growth in key financials.
In FY11, both revenues and profits had low single digit growth over the previous fiscal.
In the first half of FY12, revenues rose just 6.2 per cent compared to the same period last year, while net profits more than halved to Rs 32.1 crore.
The company derives its revenue from three segments — BFSI, telecom and media and healthcare, with each of these verticals contributing 30-35 per cent to the overall pie.
Firstsource has been facing a decline in revenues from telecom and media as well as healthcare.
The company also has large amounts of debt to be serviced. As of September 2011, Firstsource has secured and unsecured loans to the tune of Rs 2,086.6 crore in its books.
Employee costs too have been increasing steadily for the company, with the first half of this fiscal seeing a 14.5 per cent rise in personnel expenses over the same period in the previous year. This may be attributed to the fact that it has a high-cost structure as 24.5 per cent of its workforce is based outside India. This adds to the pressure on margins.
Attrition too is extremely high at over 40 per cent across geographies, posing execution challenges.
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