The Hindu Business Line : Firstsource Solutions Q3 net down 44%

Mumbai, Feb. 2 Firstsource Solutions has reported a 44 per cent dip in net profit for the third quarter ended December 31, 2008, as it incurred one-time costs associated with recruitment of nearly 3,000 employees and commissioning of four new delivery centres.

The city-based firm posted a net profit of Rs 11.5 crore against Rs 20.6 crore in the year-ago quarter. On the other hand, revenues for the quarter surged by 18.9 per cent toRs 4,44.2 crore (Rs 373.7 crore).

Two of the major domestic telecom companies which work with Firstsource had ramped up their operations with the BPO in the quarter gone by, Mr Ananda Mukerji, Managing Director & CEO, said. The back-office firm spent Rs 15.50 crore in setting up delivery infrastructure and recruiting 3,000 odd employees.

As on December quarter-end, it had 22,520 employees on its rolls. “The impact of the US recession is not only continuing to affect business in BFSI, but some impact is also starting to be felt by sectors earlier unaffected like healthcare. We are, however, seeing positive momentum in the telecom vertical with large customers projecting increases in work for the next year,” said Mr Mukerji.

While pricing continues to be relatively stable, the company did some cases of price reduction. “We expect operating EBIT and margins to recover in the fourth quarter. Exchange rate volatility, primarily the depreciation of the pound versus the dollar, continues to be an area of concern,” said Mr Carl Saldanha, Chief Financial Officer, Firstsource. However, it has not made any changes to its revenue target for the year.

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