Buy Firstsource Solutions, target price Rs 150: JM Financial

JM Financial has buy call on Firstsource Solutions with a target price of Rs 150. The current market price of Firstsource Solutions is Rs 108.85. Time period given by analyst is one year when Firstsource Solutions Ltd. price can reach defined target.

Firstsource Solutions Ltd., incorporated in the year 2001, is a Mid Cap company (having a market cap of Rs 7625.08 Crore) operating in IT Enabled Services sector.

Firstsource Solutions Ltd. key Products/Revenue Segments include I T Enabled Services and Other Operating Revenue for the year ending 31-Mar-2022.



Financials
For the quarter ended 30-06-2022, the company reported a Consolidated Total Income of Rs 1478.71 Crore, down -4.20 % from last quarter Total Income of Rs 1543.54 Crore and down -.41 % from last year same quarter Total Income of Rs 1484.79 Crore. Company reported net profit after tax of Rs 85.09 Crore in latest quarter.

Investment Rationale
The brokerage remains constructive on Firstsource notwithstanding the weak financial performance that will persist through FY23 due to the drag from a 50% decline in the mortgage business. It finds comfort in underlying BPM strength, strong growth outside of Mortgage (20% YoY in FY22 and 15%+ in FY23 as well)l which should driven return to double digit growth starting FY24 in addition to the reasonable cash generation and payout metrics.

Promoter/FII Holdings
Promoters held 53.66 per cent stake in the company as of 30-Jun-2022, while FIIs owned 7.95 per cent, DIIs 14.57 per cent.