Firstsource to shun non-profitable clients to boost revenue

MUMBAI: BPO firm Firstsource Solutions said it is looking at strengthening its revenues this year by eliminating non-profitable clients.

The company, which posted 41.6 per cent jump in net profit at Rs 41.04 crore for the June quarter, is looking at consolidating its topline and increasing margins.

"Fundamentally, this year will be devoted to consolidation of topline. There are some accounts which are not profitable. There will be rationalisation of such customers. There will be a focus on costs and margins," Firstsource Solutions Chairman Sanjiv Goenka told reporters here.

Revenues will get consolidated with better quality accounts and thus, bottomline will also grow, he added. "FY15 onwards we will again see a ramp up in revenues," Goenka said.

Revenues rose 6.5 per cent to Rs 719.12 crore for the reported quarter compared to Rs 675.170 crore in the corresponding period last year.

Last year, RP-Sanjiv Goenka Group had acquired 49.5 per cent stake in Firstsource through a wholly-owned subsidiary of CESC Limited in a Rs 400 crore deal.

It further acquired 7.36 per cent through an open offer, taking its total shareholding to 56.86 per cent.

Asked about the verticals which could see non-profitable clients being weeded out, MD and CEO Rajesh Subramaniam declined to name the clients, but said, "There are non-profitable clients who will either be converted to profitable or we will have to exit."

He said the company did an EBIDTA of 8.2 per cent in Q1 last year and this year, it's 11.2 per cent in Q1.

"So, you can get a sense that we will be north of 12-12.5 per cent in EBIDTA, which is a clear 200-250 bps improvement over last year," he added.