Share of Firstsource Solutions Limited has delivered 403 per cent return to its shareholders in the last 12 months. The share stood at Rs 37.7 on July 7, 2020. It has zoomed to Rs 189.70 today, translating into gains of 403 per cent during the period. In comparison, Sensex rose 45 per cent in one year.
Rs 5 lakh invested in the company a year ago would have turned into Rs 25.15 lakh today. The midcap stock has gained 85 per cent on a year-to-date basis.
With a market capitalisation of over Rs 13,000 crore, the share stands higher than 10 day, 20 day, 50 day, 100 day, and 200-day moving averages and lower than 5 day moving averages.
According to MarketsMojo, the stock seems fairly valued at the moment. Over the past year, its profits have risen by 33.8%; the price/earnings to growth ratio (PEG) ratio of the company is 0.9 and the earnings per share (EPS) has decreased to Rs 0.69 in March 2021 from Rs 1.32 in March 2020.
The company has declared positive results for the last 4 consecutive quarters and the stock is trading at a discount compared to its average historical valuations. Firstsource Solutions has a low Debt to EBITDA ratio of 1.18 which shows that the company has a strong ability to service debt. However, the company is borrowing more to fund its operators as the debt-equity ratio of the company has increased to 0.11.
The technical trend has improved from Mildly Bullish on March 4, 2021. The stock is technically in a Bullish range now and has generated 74.69% returns since then. Multiple factors for the stock are bullish like MACD, Bollinger Band, and KST.
Also, the company has high institutional holdings at 24.76%. Their stake has increased by 0.59% over the previous quarter.
Firstsource Solutions posted a net profit of Rs. 46.68 crore for the quarter ended March 2021 as against a net profit of Rs 91.58 crore in March 2020. Net Sales stood at Rs 1,462.84 crore in March 2021 compared to Rs 1,080.45 crore in March 2020.
"As the second COVID wave rips relentlessly through the country, I'd like to wish our employees, their families and communities, strength and good health in the days to come. Our Q4 results cap an impressive year where Firstsource delivered industry-leading revenue growth of 35.4% YoY, with all segments growing consistently," said Dr. Sanjiv Goenka, Chairman, RPSG Group and Firstsource Solutions.
"I'm very pleased with how our digital services offerings continue to mature and scale, enabling us to play an integral role in our clients' digital journeys. Looking ahead, we see a great year of growth with our business performing well in an improving economic outlook," he added.
Meanwhile, stock market veteran Rakesh Jhunjhunwala has reduced his stake in the company. Big Bull Rakesh Jhunjhunwala held 1.29% or 90 lakh shares of the Information technology and IT-enabled services (ITES) firm for the quarter ended December.
Jhunjhunwala held 2.88 per cent stake, or 2 crore shares, in Firstsource Solutions as on September 30, 2020, as per the shareholding pattern data available on the BSE. Now, his shareholding has come below 1 per cent.
Firstsource Solutions is a provider of a range of business process management services across the customer life cycle delivered through transaction processing.
The company's segments include banking, financial services and insurance and non-banking, financial services and insurance. It is involved in information technology-enabled services, including business process outsourcing.
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