Firstsource Q2 net up 2.8% y-o-y

Firstource posted net profit of Rs 29 crore for the second quarter ended September 30, 2009, a rise of 2.8 per cent from Rs 28.3 crore in the corresponding quarter last financial year.

Revenue for the quarter went up 15 per cent to Rs 488.7 crore from Rs 424.9 crore in the same quarter last year.

Sequentially (compared to the trailing quarter), the firms net profit was down 23.68 per cent from Rs 38 crore--revenue was marginally up 0.8 per cent from Rs 484.8 crore. The net profit was down sequentially as the June quarter had an unusual income gain on foregin currency convertible bonds (FCCBs) buyback and cancellations of hedges.

“We had a strong quarter both in terms of growth and margins. Even in terms of deal pipeline this quarter has done well. The volume pick that we have seen in the first nine months this year has been better than the first-nine months of last year. In the healthcare segment the total annual contract value of deals that we have closed in the first half has been better than last year,” said Ananda Mukerji, Managing Director and Chief Executive Officer, Firstsource.

Telecom was the main growth driver for the company during the quarter due to ramp ups from UK region. The revenue contribution increased to 38.1 per cent for the quarter from 35 per cent q-o-q. Within the healthcare segment, the payer (health insurance providers) side of business still has slow volume growth. But on the provider side, where the company’s Medassist acquisition is a part, has grown well, said Mukerji.

Firstsource had a net addition of 3,077 employees, which brings its total headcount to 26,432. The company’s attrition has gone up. It Q1 annualised attrition for offshore (India, Argentina and Philippines) went up to 39.1 per cent from 31.3 per cent in Q1FY10. Onshore attrition was 42 per cent from 33 per cent. But attrition in domestic operations came down to 76.9 per cent from 86.6 per cent.

Revenue contribution from top client increased to 12.3 per cent from 10 per cent y-o-y and 10.4 per cent q-o-q. And top five customers contribution also increased to 33.2 per cent from 30.4 per cent q-o-q.