BSE:532809

Stock Analysis Report

Firstsource Solutions

Executive Summary

Firstsource Solutions Limited provides customized business process management services in India, the United States, the United Kingdom, the Philippines, and internationally.


Snowflake Analysis

Undervalued with excellent balance sheet and pays a dividend.


Similar Companies

Share Price & News

How has Firstsource Solutions's share price performed over time and what events caused price changes?


Latest Share Price and Events

Stable Share Price: 532809's share price has been volatile over the past 3 months.


Market Performance


7 Day Return

-7.7%

532809

2.0%

IN IT

-3.0%

IN Market


1 Year Return

-41.4%

532809

-15.3%

IN IT

-29.2%

IN Market

Return vs Industry: 532809 underperformed the Indian IT industry which returned -15.3% over the past year.

Return vs Market: 532809 underperformed the Indian Market which returned -29.2% over the past year.


Shareholder returns

532809IndustryMarket
7 Day-7.7%2.0%-3.0%
30 Day-35.1%-19.0%-26.9%
90 Day-31.8%-18.6%-28.5%
1 Year-35.5%-41.4%-12.6%-15.3%-27.7%-29.2%
3 Year-25.8%-34.0%35.3%27.0%-15.2%-19.9%
5 Year-1.0%-12.0%30.5%18.0%-3.1%-8.1%

Price Volatility Vs. Market

How volatile is Firstsource Solutions's share price compared to the market and industry in the last 5 years?


Simply Wall St News

No news available

Valuation

Is Firstsource Solutions undervalued compared to its fair value and its price relative to the market?

>50%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: 532809 (₹27.55) is trading below our estimate of fair value (₹69.8)

Significantly Below Fair Value: 532809 is trading below fair value by more than 20%.


Price To Earnings Ratio

PE vs Industry: 532809 is good value based on its PE Ratio (5.5x) compared to the IT industry average (7x).

PE vs Market: 532809 is good value based on its PE Ratio (5.5x) compared to the Indian market (9.2x).


Price to Earnings Growth Ratio

PEG Ratio: 532809 is good value based on its PEG Ratio (0.6x)


Price to Book Ratio

PB vs Industry: 532809 is overvalued based on its PB Ratio (0.7x) compared to the IN IT industry average (0.7x).


Next Steps

Future Growth

How is Firstsource Solutions forecast to perform in the next 1 to 3 years based on estimates from 4 analysts?

9.5%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: 532809's forecast earnings growth (9.5% per year) is above the savings rate (6.5%).

Earnings vs Market: 532809's earnings (9.5% per year) are forecast to grow slower than the Indian market (19.8% per year).

High Growth Earnings: 532809's earnings are forecast to grow, but not significantly.

Revenue vs Market: 532809's revenue (7.9% per year) is forecast to grow slower than the Indian market (9.1% per year).

High Growth Revenue: 532809's revenue (7.9% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: 532809's Return on Equity is forecast to be low in 3 years time (13.1%).


Next Steps

Past Performance

How has Firstsource Solutions performed over the past 5 years?

10.3%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: 532809 has high quality earnings.

Growing Profit Margin: 532809's current net profit margins (8.7%) are lower than last year (9.9%).


Past Earnings Growth Analysis

Earnings Trend: 532809's earnings have grown by 10.3% per year over the past 5 years.

Accelerating Growth: 532809's has had negative earnings growth over the past year, so it can't be compared to its 5-year average.

Earnings vs Industry: 532809 had negative earnings growth (-7%) over the past year, making it difficult to compare to the IT industry average (7.2%).


Return on Equity

High ROE: 532809's Return on Equity (12.8%) is considered low.


Next Steps

Financial Health

How is Firstsource Solutions's financial position?


Financial Position Analysis

Short Term Liabilities: 532809's short term assets (₹9.2B) do not cover its short term liabilities (₹11.0B).

Long Term Liabilities: 532809's short term assets (₹9.2B) exceed its long term liabilities (₹4.5B).


Debt to Equity History and Analysis

Debt Level: 532809's debt to equity ratio (25%) is considered satisfactory.

Reducing Debt: 532809's debt to equity ratio has reduced from 36.7% to 25% over the past 5 years.

Debt Coverage: 532809's debt is well covered by operating cash flow (57.2%).

Interest Coverage: 532809's interest payments on its debt are well covered by EBIT (8.8x coverage).


Balance Sheet

Inventory Level: 532809 has a low level of unsold assets or inventory.

Debt Coverage by Assets: 532809's debt is covered by short term assets (assets are 1.4x debt).


Next Steps

Dividend

What is Firstsource Solutions's current dividend yield, its reliability and sustainability?

9.07%

Current Dividend Yield


Dividend Yield vs Market

Notable Dividend: 532809's dividend (9.07%) is higher than the bottom 25% of dividend payers in the Indian market (0.95%).

High Dividend: 532809's dividend (9.07%) is in the top 25% of dividend payers in the Indian market (4.18%)


Stability and Growth of Payments

Stable Dividend: Whilst dividend payments have been stable, 532809 has been paying a dividend for less than 10 years.

Growing Dividend: 532809's dividend payments have increased, but the company has only paid a dividend for 2 years.


Current Payout to Shareholders

Dividend Coverage: With its reasonably low payout ratio (40%), 532809's dividend payments are well covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: 532809's dividends in 3 years are forecast to be well covered by earnings (42.2% payout ratio).


Next Steps

Management

How experienced are the management team and are they aligned to shareholders interests?

2.7yrs

Average management tenure


CEO

Vipul Khanna

0.58

Tenure

Mr. Vipul Khanna serves as Managing Director, Chief Executive Officer and Additional Director at Firstsource Solutions Limited since August 2, 2019. Mr. Khanna was Executive Vice President and Global Head  ...


Leadership Team

NamePositionTenureCompensationOwnership
Dinesh Jain
President & CFOno data₹48.46m0.0036% 688.1k
Pooja Nambiar
Company Secretary & Compliance Officer 3.17yrs₹2.68mno data
Vipul Khanna
MD, CEO & Additional Director0.58yrno data0.015% 2.8m
Soma Pandey
President & Chief Human Resources Officer2.17yrsno datano data
Manjunath Srivatsa
Senior Vice President of Administration & Physical Securityno data₹7.03mno data
Ankur Maheshwari
Head of IR & Corporate Planning (M&A)no datano datano data
Rajlakshmi Raghavan
Head of Marketing & Corporate Communications2.17yrsno datano data
Deep Babur
Executive Vice President of Financeno data₹10.39m0.0025% 479.8k
M. Satish
Executive Vice President of Human Resources7.08yrs₹12.68mno data
Bhupendra Gupta
Senior Vice President of Business Transformation5.67yrs₹10.18m0.0016% 309.7k

2.7yrs

Average Tenure

47yo

Average Age

Experienced Management: 532809's management team is considered experienced (2.7 years average tenure).


Board Members

NamePositionTenureCompensationOwnership
Vipul Khanna
MD, CEO & Additional Director0.58yrno data0.015% 2.8m
Sanjiv Goenka
Chairman7.25yrs₹300.00kno data
Pradip Roy
Independent Non-Executive Director7.25yrs₹750.00kno data
Pradip Khaitan
Non-Executive & Non Independent Director5.33yrs₹250.00kno data
Shashwat Goenka
Non Independent Non-Executive Director7.25yrs₹450.00kno data
Subrata Talukdar
Non Independent Non-Executive Director7.25yrs₹900.00kno data
Grace Koshie
Independent Non-Executive Director5.08yrs₹650.00kno data
Pratip Chaudhuri
Non-Executive Independent Director0.92yrno datano data
Sunil Mitra
Non-Executive Independent Director0.92yrno datano data
Charles Richard Stagg
Non-Executive Independent Director0.83yrno datano data

5.2yrs

Average Tenure

63yo

Average Age

Experienced Board: 532809's board of directors are considered experienced (5.2 years average tenure).


Ownership

Who are the major shareholders and have insiders been buying or selling?


Insider Trading Volume

Insider Buying: 532809 insiders have bought more shares than they have sold in the past 3 months.


Recent Insider Transactions

Ownership Breakdown

Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.


Top Shareholders

Company Information

Firstsource Solutions Limited's company bio, employee growth, exchange listings and data sources


Key Information

  • Name: Firstsource Solutions Limited
  • Ticker: 532809
  • Exchange: BSE
  • Founded: 2001
  • Industry: Data Processing and Outsourced Services
  • Sector: Software
  • Market Cap: ₹19.115b
  • Shares outstanding: 693.83m
  • Website: https://www.firstsource.com

Number of Employees


Location

  • Firstsource Solutions Limited
  • Paradigm ‘B’ Wing
  • 5th Floor, Mindspace
  • Mumbai
  • Maharashtra
  • 400064
  • India

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
532809BSE (Mumbai Stock Exchange)YesEquity SharesININRFeb 2007
FSLNSEI (National Stock Exchange of India)YesEquity SharesININRFeb 2007

Biography

Firstsource Solutions Limited provides customized business process management services in India, the United States, the United Kingdom, the Philippines, and internationally. The company offers customer lifecycle solutions, including acquisition, account servicing, collection, and retention solutions; sales ledger administration and collection, cash management and administration, payroll, VAT, and tax management services; credit and bank cards, private label retail cards, automotive and personal loans, overdraft accounts, and mortgage collection services; healthcare collection services; and default management, prevention, and recovery solutions. It also provides contact center and back-office processing services; claims processing and adjudication, digital mailroom and document, enterprise claim, omni channel contact center, provider data management and credentialing, quality assurance, and telehealth support services, as well as member enrollment, billing, and eligibility services; and MedAssist, a revenue cycle product suite to enhance the revenue for hospitals and patient experience. In addition, the company manages claims handling transactions, including claims management, adjudication, remediation, and fulfillment; origination, home equity, routine and default servicing, title, and closing and escrow underwriting services; invoice factoring and discounting, payroll finance, debtor protection, deal management and pay-outs, cash allocation, sales ledger management, account servicing, complaints handling, credit control, and payment recovery; and business consulting services. It serves the banking and financial services, healthcare, telecom and media, insurance, mortgage, utilities, and other industries. The company was formerly known as ICICI Onesource Limited and changed its name to Firstsource Solutions Limited in 2006. The company was founded in 2001 and is based in Mumbai, India. Firstsource Solutions Limited is a subsidiary of Spen Liq Private limited. 


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2020/03/28 13:08
End of Day Share Price2020/03/27 00:00
Earnings2019/12/31
Annual Earnings2019/03/31


Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.