BPM firm Firstsource Solutions, an RP-Sanjiv Goenka Group company is looking at global acquisitions as the path to grow its business and diversify a portfolio in the coming years.
The BPM (business process management) company is on the lookout to acquire niche companies mainly in the UK and the USA, whose products and services are in line with the category, Firstsource is in.
“Niche acquisitions will be something we will eye for”, Sanjiv Goenka, the group’s chairman said adding that sectors like data analytics will play a major role in the coming days to expand Firstsource’s business portfolio.
In January this year, the RP-Sanjiv Goenka Group company acquired the BPO wing of US-based mortgage technology and services firm ISGN for $ 12.6 million.
While ISGN helped Goenka to strengthen its BFSI portfolio, the acquisition also passed over a $ 240 million debt to Firstsource.
However, strong business growth in the last quarter helped Firstsource pay back $11.3 million every quarter to the lenders. Now, with two more fiscal quarters to go, Goenka is hoping that the outstanding debt will come down to $ 76 million by the end of the current fiscal year.
The top official is of the view that Firstsource will be able to recover the entire cost borne for the ISGN acquisition in 18 months from the previous projection of three years.
In the coming months, the company will retain its focus on the media, BFSI and healthcare verticals while expanding into support services for the aviation segment.
The company has recently signed up with a British airline company to provide support services for an undisclosed amount and entered into a five-year services contract with an Indian nationalized bank for Rs 250 crore.
“Right now, negotiations are on with different companies for various contracts valued at $ 332 million”, he added stating that normally, it takes 12-18 months to sign up for such contracts.
For the second quarter of the current fiscal year, Firstsource posted an increase of 21.5% in its net profit at Rs. 71.26 crores as against the net profit of 58.66 crores. Revenues in the July-September period this fiscal year stood at Rs. 884.35 crores as against 787.79 crores in the year-ago period.
The BFSI segment contributed to 35.5% to its revenue in the quarter followed closely by the healthcare segment accounting for 34.5% of the quarterly revenue. Telecom and media verticals contributed 29.8% of the total turnover during the second quarter of the 2016-17 fiscal year.
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Source: Business-Standard