Buy Firstsource Solutions, target price Rs 84: ICICI Direct

ICICI Direct has given a buy rating to Firstsource Solutions with a target price of Rs 84. The share price moved up by 3.35 per cent from its previous close of Rs 76.10. The stock’s last traded price is Rs 78.65.
Firstsource Solutions Ltd., incorporated in the year 2001, is a Mid Cap company (having a market cap of Rs 5430.01 Crore) operating in IT Enabled Services sector.

Financials
For the quarter ended 30-09-2020, the company reported a Consolidated sales of Rs 1178.33 Crore, up 11.83 % from last quarter Sales of Rs 1053.72 Crore and up 21.29 % from last year same quarter Sales of Rs 971.46 Crore Company reported net profit after tax of Rs 105.28 Crore in latest quarter.

Investment Rationale
From a long term perspective, the brokerage believes increased contribution from top client, healthy deal pipeline & outlook in mortgage business and traction in payer business will drive revenues. Also, the strategy of increased penetration in technology segment, cross-selling of platforms business, hiring of leaders to boost its digital business would further drive long term revenues. This, coupled with upward revision in EPS estimate and expected debt reduction, prompt it to remain positive on the stock

Promoter/FII Holdings
Promoters held 53.9 per cent stake in the company as of June 30, 2020, while FIIs held 7.6 per cent, DIIs 12.7 per cent and public and others 25.8 per cent.