After turning around Firstsource, Sanjiv Goenka eyes more acquisition in IT space

The sales pipeline for Firstsource currently stands at $400 million, registering a 33% growth compared to the previous year

After turning around business process outsourcing (BPO) firm, Firstsource Solutions in the last two years, R P-Sanjiv group is now looking for fresh acqusition in the information and technology space.

"We will continue with the ongoing operational restructuring exercise in Firstsource for the next two quarters and once that is done, we would definitely look for more acquisitions in the IT Space," Goenka said today.

Firsource has recorded a significant improvement, since the group's flagship company CESC acquired controlling stake in the loss-making and highly indebted BPO firm in 2012 for Rs 640 crore.

“The debt equity ratio is at 0.3:1 as compared to 1.5:1 at the time of acquisition.Our total outstanding debt as of now stands at $114 million. We are on schedule with our FCCB (foreign currency convertible bonds) repayment,” he noted.

The sales pipeline for Firstsource currently stands at $400 million, registering a 33 per cent growth compared to the previous year.

Speaking on the turnaround strategies, Goenka said, Firstsource had shifted its offices in the US and Philippines to low cost centres. Also, the company has terminated loss-making accounts like British Telecom Manila, Idea Pritech and Airtel Premium.

“During 2013-14, we have saved $7 million by managing unwanted cost. We have also done a geographical realignment to reduce the cost. We have been able to reduce our cost effectively without compromising on the quality of the work. We have saved $2 mln by shedding the loss making accounts. Our focus has been on the bottom-line and we expect to see good growth again this fiscal,” Goenka said.

With a thrust on IT business, he added, it would contribute about 25 to 30 per cent of group's bottomline in the next fiscal compared to 15 per cent currently.