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Last Updated : May 08, 2019 01:18 PM IST | Source: Moneycontrol.com

Buy Firstsource Solutions; target of Rs 60: ICICI Direct

ICICI Direct is bullish on Firstsource Solutions has recommended buy rating on the stock with a target price of Rs 60 in its research report dated May 07, 2019.

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ICICI Direct's research report on Firstsource Solutions


Firstsource Solutions (FSL) reported a weak performance on the revenue front as revenues declined 1.8% QoQ to Rs 967 crore mainly on account of a delay in deal closure in the collection business (from December end to April end). Lower employee expenses (down 3.4% QoQ) led to a beat on margin expectations to 14.3% (vs. 13.6% estimate). Based on the positive outlook for BFSI, healthcare provider segment and digital revenues, we expect accelerated growth for the next two years and estimate growth of 8.2% CAGR to Rs 4477 crore in FY19-21E with EBITDA margins of 14.5% in FY21E.


Outlook


This coupled with reasonable valuation (7.7x FY21E EPS) prompts us to maintain our BUY recommendation with a revised target price of Rs 60/share (~9x FY21E EPS).


For all recommendations report, click here


Disclaimer: The views and investment tips expressed by investment experts/broking houses/rating agencies on moneycontrol.com are their own, and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.



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First Published on May 8, 2019 01:18 pm
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