Company Brief

Established in 2001 Firstsource, a part of the RP-Sanjiv Goenka Group, is a leading provider of Business process solutions to more than 100 global businesses in the Banking and Financial Services, Healthcare, Communications, Media and Technology, and diversified industries.

Firstsource employs over 23,000 people across the US, UK, India and Philippines. partner for over 150 leading global brands, including several Fortune 500 and FTSE 100 companies.

Business Model

BFS:

Mortgage servicers in the US: 5 of top 15

Retail banks in the UK: 3 of top 6

Lenders in the US: 5 of top 15

Credit card issuers in the US: 5 of top 10

Healthcare: On the Health Plans and Healthcare Services front – our digital-first offerings, including Digital Intake, Telehealth and Remote Patient Monitoring, reimagine the technology topography to deliver the outcomes that matter. In the Life Sciences industry – as consumer participation in decision-making, personalizing therapies, and product development becomes a top priority, our digitally enabled customer engagement solutions help enhance patient experience and coordinated care services such as Eligibility & Enrolment Services, Claims Adjudication & Adjustments, Telehealth Tech Support etc

Hospitals in the US: 1000+

Health insurance/managed care companies in the US: 6 of top 10 Hospitals in the US

CMT: CMT organizations re-imagine their human-machine interfaces, extract value from digitized data, and build next-gen solutions to consistently outperform their competition. Such as Onboarding, Tier 1 & Tier 2 Customer Support, Self-Service / Contact Avoidance, Complaints Handling and Remediation, Inbound Sales and Outbound Sales, Retention and Loyalty etc

76.4% of the business coming from USA,UK 21% and ASIA 2.6%

Competitive Strength

• Leader in US non-bank lender market
• Top 5 Consumer debt collections agency in the US
• Diversified Business in BPM
• Part of RP-Sanjiv Goenka Group

Future prospects

• The company indicated that the guidance revision is due to added pressure in mortgage business, slower than anticipated growth in delinquencies impacting collection business and some deal delay in healthcare business
• The company indicated that high interest rate had led to a decline of 86% in refinance volume and 42% decline in purchase volume resulting in 55% decline in mortgage business in FY23, implying headwinds of 15% to overall business.
• The company further indicated that Stonehill (acquisition company) was impacted by macro headwinds. It is expecting 25-35% erosion in its business since acquisition which was supposed to expand and strengthen Firstsource’s US mortgage-based products and services.
• Revenues grew by 1.8% year-on-year in constant currency terms and came in at Rs.14,882 million or $187 million. Organic revenue excluding the impact of mortgage decline, grew by 12.8% year-on-year in constant currency terms and; Operating margins were at 8.4%; EPS degrew by 6.1% year-on-year and came in at Rs.1.84.
• Considering these headwinds netted against the benefits of our cost action we now expect operating margins to be in the range of 9% to 9.5% for FY2023.
• When the mortgage market stabilizes we are positioned well to capture the volume and the wallet spend
• it will be flat to Q3 and Q4. At the high end I think Q3 will continue to be flat, but we expect good upside in Q4 from pickup in collections, healthcare, and Europe. Pretty much the growth will be sort of back ended in Q4 at the high end of our forecast
• Transitioning from being a BPO player to a platform player won a very major contract in the healthcare space. It is a $210-million deal, which we along with our partner, had bid for. Our share is about $110 million and we have won this in face of competition from TCS, Infosys

• It has partnered with Eco-Mail, a leading SaaS provide that transforms physical mail assets into digital assets Eco-Mail’s software adds to Firstsource’s digital enterprise workflow capabilities by enabling health plans to rapidly process and digitize incoming paper mail, making the speed of processing faster, more accurate, and more efficient.
  
  
• PatientMatters will direct Mon Health’s Pre-Access Service Center and process workflows and related functions. It will also support Mon Health’s mission of providing a positive patient financial experience, improving collections, and enhancing registration quality and speed

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