'Baniya' approach helped Firstsource turnaround: Sanjiv Goenka

Kolkata, July 25: The RP-Sanjiv Goenka group's IT foray with the acquisition of debt-ridden BPO company Firstsource Solutions Ltd in 2012 has been successfully turned around with 'Baniya' approach and the new vertical will generate 25-30 per cent of the group's topline in near future.

"We used simple 'Baniya' approach which focused at cost reduction and improved bottomline and this strategy paid off," group chairman Sanjiv Goenka said here today. Baniya is typically referred to traders and they are focused at profitability more than topline.

The strategy helped the company to improve its margin by 300 basis points to 11.5 per cent post takeover in October 2012, Goenka said. On consolidated basis, the net profit of Firstsource for FY'14 had jumped to Rs 193 crore from Rs 62 crore in FY'12.

He said the company had reduced its debt burden significantly to save on interest cost and the debt equity ratio had been brought down to 0.3:1 from almost 1:1.

Streamling operation with closure of loss making delivery centres and accounts, launch of four products and new business had boosted the company's performance. Goenka gave a hint that the company might bring down the number of delivery centres to around 40 from 46 now spread across various geographies.

Two had been closed or relocated. Firstsource has seen a 33 per cent growth in sales, with USD 372 million in FY 14 against USD 274 million a year ago.

The group was aiming for a 25-30 per cent of revenue from IT before FY'16.

PTI