Firstsource’s turnaround under its new owners RP-Sanjiv Goenka Group continues. Q3 revenue for the period to 31 December was up 12.1% to Rs. 7.99bn (£77.6m) and EBIT profits were up 44.6% to Rs. 742m (£7.2m), pushing the margin to 9.4% from 7.2% last time.
Further good news for Firstsource’s UK operation too, which saw revenues continue to rise, up 30% to Rs. 2.9bn (£28.2m). Pre-tax profits meanwhile more than doubled to Rs. 534m (£5.2m). The better performance has no doubt been driven by onboarding new business from two key UK clients (see here) and also delivering better efficiencies via a reduction in headcount. Firstsource now employs 1,644 people in the UK, down from 2,184 just last quarter. Local press reports have pointed to job cuts recently (see here).
As we pointed out in our recent note (see What is the future of India HQ’d players in UK BPS?), Firstsource is one of a select few offshore centric players to see the UK as a key onshore delivery location – a strategy that seems to be bearing fruit right now (see ‘Reshoring’ gathers pace). Indeed chairman Sanjiv Goenka noted the strengthening of Firstsource’s ‘UK market as a key onshore delivery geography’ with important new opportunities emerging in healthcare and customer management.
Encouraging. But at the same time, Firstsource needs to be aware that opportunities and growth will be increasingly dependent on investment back into UK plc.