This Rakesh Jhunjhunwala-owned stock hits 12-year high; nears record peak

The stock of Firstsource Solutions is 5 per cent away from its all-time high level of Rs 93, touched on May 15, 2007

Shares of Firstsource Solutions rose 11 per cent and hit an over decade-high of Rs 88.70 on the BSE on Thursday, surging 24 per cent in the past three days, after the firm acquired PatientMatters, a healthcare Revenue Cycle Management (RCM) solutions provider. The stock was trading at its highest level since January 2008. Besides, it is 5 per cent away from its all-time level of Rs 93, touched on May 15, 2007.

At 12:56 pm, the stock was trading 10 per cent higher at Rs 87.55 on the BSE on the back of heavy volumes. In comparison, the S&P BSE Sensex was up 0.61 per cent at 46,725 points. Trading volumes on the counter jumped an over four-fold as nearly 14 million equity shares had changed hands on the NSE and BSE till the time of writing of this report.

Ace investor Rakesh Jhunjhunwala held 20 million shares, or 2.88 per cent stake, in Firstsource Solutions as on September 30, 2020, the shareholding pattern data show.

Firstsource Solutions, a RP-Sanjiv Goenka Group company, is a global provider of Business Process Management (BPM) services. Meanwhile, PatientMatters unifies disparate registration, bill estimation, and financial services with intelligent workflows and eligibility services, improving revenue realization for Hospitals. 

"The acquisition complements Firstsource's Provider Business on two dimensions: strengthening presence in large markets like Texas and New York and adding new capabilities of pre-authorization and patient bill estimation at the front-end of the RCM cycle," the company said in a press release.

This strategic acquisition magnifies our strong patient-centric revenue management capabilities and creates adjacent areas for growth for us," Dr. Sanjiv Goenka, Chairman, Firstsource Solutions and RP-Sanjiv Goenka Group said.

On December 9, Firstsource Solutions and  Celonis,  the  global  leader  in  Execution Management  Systems  (EMS), announced a strategic partnership that would enable businesses to quickly identify and eliminate process constraints, driving agility and optimizing outcomes.

Analysts at Dolat Captial have 'buy' rating on Firstsource Solutions with target price of Rs 100 per share. "The strong upgrade in guidance (growth leader across IT&ITeS names in FY21), robust client additions, improved profitability, widened bandwidth & market opportunities, reducing client concentration, generous payouts and compelling valuations makes a strong case for re-rating of the stock," the brokerage firm said in a September-quarter result update.

Robust growth performance and healthy client wins (added 15 client wins in Q2, 10 in Q1) led to upgrade in revenue guidance for FY21 to 9- 12 per cent (from 6 per cent to 10 per cent growth in CC terms). OPM outlook kept intact at 11.0 per cent to 11.5 per cent, as company expect further need for investments in new vertical/capabilities and increased cost on talent (in mortgage), it said.