Dolat Capital is bullish on Firstsource Solutions has recommended buy rating on the stock with a target price of Rs 45 in its research report dated June 27, 2020.
Dolat Capital's research report on Firstsource Solutions
Firstsource Solutions (FSL) had quite an eventful FY20 with changes in the top leadership (inducted external CEO) and few other business heads. Reconfiguration of its strategy under new CEO is around accelerating growth (GTM sales), scope (adjacencies, CX-CM) and scale (getting into new verticals such as Tech and expansion in Utilities) although the same has resulted in temporary reduction in profitability due to scaled investments in hiring/capabilities. We believe the renewed strategy augurs well towards adding stability and drivers to revenue profile.
Given the huge business prospects, attractive dividend yield (6%+) and compelling valuations we maintain our Buy rating on the stock with TP of Rs45 valued at 8x PE on FY22E earnings.
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