FSL dips 6% in 2 days as Rakesh Jhunjhunwala cuts stake in December quarter

Rakesh Jhunjhunwala's stake in the company declined to 1.29 per cent in December quarter from 2.88 per cent at the end of September quarter

Shares of Firstsource Solutions (FSL) slid 4 per cent to Rs 95.10 on the BSE on Tuesday, falling 6 per cent in the past two trading days after ace investor Rakesh Jhunjhunwala more-than-halved his stake in the company during the October-December quarter (Q3FY21).

With the past two days' decline, th stock has corrected 17 per cent from its record high level of Rs 115.45, touched on December 29, 2020.

According to the December 2020 quarter shareholding pattern disclosed by FSL, Rakesh Jhunjhunwala’s stake in the company declined to 1.29 per cent from 2.88 per cent at the end of September quarter. Jhunjhunwala had sold 11 million or 1.59 percentage point stake in FSL during Q3FY21, after sharp rally in market price.

During the quarter, FSL -- a global provider of Business Process Management (BPM) services -- had rallied 39 per cent and surpassed its previous high recorded in May 2007. In comparison, the S&P BSE Sensex was up 25 per cent during the same period.

Meanwhile, mutual funds (11.17 per cent) and foreign portfolio investors (FPIs) (7.21 per cent) have increased their stake in FSL by 1.87 percentage points and 0.65 percentage points, respectively, data shows.

For Q2FY21, FSL had reported better-than-expected results, with a sequential revenue growth of 13 per cent at $160 million led by sustained traction in BFSI (banking, financial services and insurance) vertical and very sharp recovery in communications, media and technology (CMT) segment.

FSL growth guidance even at mid-point (10.5 per cent) would imply that it may lead peers and above on growth front in FY21E. More importantly growth is quite broad based (unlike in past) and is likely to sustain in near future given sound underlying macros and its well complementing offerings (has enhanced all its Platform offerings to support Digital transformation opportunities), analysts Dolat Capital said in Q2 result update.

In December, FSL has acquired PatientMatters, a healthcare Revenue Cycle Management (RCM) solutions provider. PatientMatters unifies disparate registration, bill estimation, and financial services with intelligent workflows and eligibility services, improving revenue realization for Hospitals. In tandem with the acquisition, Firstsource plans to consolidate its Healthcare Provider brands MedAssist and PatientMatters, under its enterprise umbrella, the company said.