Firstsource Solutions Ltd (FSL) is a Sanjiv Goenka Group owned Business Process Management (BPO) company.
• FSL operates from 45 global operation locations with over 23,000 employees
• In FY2016, 97% of revenues came from existing customers
• Main services:
○ Customer interaction management
○ Data processing and transaction processing
○ Collections management
○ Consulting and analytics
• Main industries supported
○ Healthcare - 39%
○ Telecom & Media - 37%
○ BFSI - 24%
• Revenue contribution from geography
○ US - 55%
○ UK - 38%
○ India - 6%
• FSL repaid $45 mn debt during FY15-16
• FSL acquired the BPO division of ISGN Corporation™ (“ISGN”), a leading provider of end-to-end BPM solutions to the U.S. mortgage industry. Mortgage is the second largest consumer spend segment in the U.S. after Healthcare.
ISGN Solutions, Inc. provides following outsourced services:
1. Mortgage Processing Outsourcing
2. Mortgage Servicing Outsourcing
3. Title and Settlement Services
4. Valuation Services
• BPM is seeing higher adoption of process-centric delivery, BPaaS analytics and Robotic process automation tools. BPaaS models are expected to grow four times faster than those of traditional BPM services from 2014 to 2020.
FSL addresses two segments within the healthcare vertical, the Payer market represented by the Insurance companies and the Provider market represented by hospitals, physician groups in the U.S.
The partnerships and alliances forged with companies like EBIX, Gaffey Healthcare, DCS Global, JDA Global, have helped the Company to become a full services provider in the Payer industry and complete end-to-end RCM services provider to the hospital segment.
Using consumer demographic data, customer interaction journeys across multiple channels (digital, voice, chat, email etc.), and transaction history, the Company has created analytical models to predict future interaction behaviour patterns of consumers. These models help to maximise revenue potential and reduce churn thereby delivering superior business outcomes to the clients. Analytics will continue to be a significant investment area for the Company going forward.
FSL has a product portfolio comprising of productised solutions in Customer Interaction Analytics (First Customer Intelligence), Web Chat (First Chat), Process Automation (First Smartomation), Workforce Management (First WF Suite), Complaints Management (First Resolve) and First Digital. In the healthcare provider segment, FSL has a Revenue Cycle Management product suite, comprising MRES, MPAT and MBOS.
Telecommunications and Media (T&M)
Technology developments proliferated a number of interaction channels with the consumers and now include self-help, web chat, video chat, social media and virtual-assistants apart from the traditional interaction channels of IVR, phone support, SMS, email and paper correspondence. Investing to deploy an effective Omni-channel framework reduces the overall cost to serve for telecom and media organisations. The focus will be on customer journeys across different channels, while orchestrating the customer experience across different channels in a seamless, integrated and consistent manner.
The acquisition of ISGN Solutions in the US mortgage industry marks the entry of FSL in a new market segment, thereby enabling it to expand its mortgage services portfolio across the US and UK markets. These end-to end services across the mortgage value chain require extensive industry and domain knowledge, coupled with differentiating innovative services which position the Company favourably into the higher value segments.
• Company has significant debt and would need additional debt for scaling up on the Sky project.
• There is significant client concentration - top client ~21%, top 5 ~44%
• Impact of UK based clients is uncertain due to Brexit. There may be loss due to currency fluctuations; new centers may need to be opened in non-UK Eurozone locations adding to significant capex & debt burden
DISCLOSURE: I am invested in the stock and thus an interested party.