Legal Process Outsourcing: Financial Performance Review
ValueNotes has conducted a study of the financial performance of over 30 pure-play Legal Process Outsourcing (LPO) service providers (their size, operating margins, solvency, and efficiency), principally in the Indian LPO industry. The study, which covers fiscal years 2007 through 2011, found that since 2007, the companies in the sample achieved an aggregated compounded annual growth rate (CAGR) of 30%. This growth has primarily been driven by large LPO service providers, with revenues exceeding Indian Rupees (INR) 500 million.
ValueNotes* has found that over the past five years, the growth rate has somewhat slowed to a more sustainable level. A key factor for growth, in the past and going forward, is revenues per employee remaining near or above INR 800k. A further key finding is that while the very small providers find it necessary to fuel growth through debt, they are hard pressed to service their increasing debt levels.
The report includes service provider profiles of 20 LPO firms, along with their service offerings, key financial ratios, shareholding patterns, and names of directors.
ValueNotes* has found that over the past five years, the growth rate has somewhat slowed to a more sustainable level. A key factor for growth, in the past and going forward, is revenues per employee remaining near or above INR 800k. A further key finding is that while the very small providers find it necessary to fuel growth through debt, they are hard pressed to service their increasing debt levels.
The report includes service provider profiles of 20 LPO firms, along with their service offerings, key financial ratios, shareholding patterns, and names of directors.
1 OPERATING EARNINGS AND MARGINS
1.1 Large companies drive industry growth
1.2 Employee costs inches up for pure-play LPO companies
1.3 EBITDA margins improve significantly
1.4 Net margins surge to their highest level since 2007
2 OPERATING CYCLE ANALYSIS
2.1 Mounting sundry debtors raise questions on revenue growth quality
2.2 Fluctuating sundry creditors drops in 2011
2.3 Debtor days vs. Creditor days gap widens
3 SOLVENCY
3.1 Liquidity concerns as Quick Ratio rises
3.2 Pure-play LPO companies start deleveraging as profits rise
4 EFFICIENCY
4.1 Return on Capital Employed declines but remains at a healthy level
4.2 ROE surges past 2007 levels after a significant fall in 2008
4.3 ROA of medium sized LPOs bounces back to take top spot
4.4 DuPont Analysis
5 COMPANY PROFILES
5.1 Acumen Legal Services
5.2 Amatra Legal Services
5.3 Atlas Legal
5.4 Bodhi Global
5.5 Clairvolex
5.6 Cobra Legal
5.7 Exactus
5.8 iBridge Solutions
5.9 Integreon
5.10 Intellevate
5.11 KLexserve
5.12 Legasis
5.13 Lexadigm
5.14 MindCrest
5.15 Pangea3
5.16 Quislex
5.17 SDD Global
5.18 TT Consultants
5.19 Tusker Legal
5.20 UnitedLex
6 APPENDIX
1.1 Large companies drive industry growth
1.2 Employee costs inches up for pure-play LPO companies
1.3 EBITDA margins improve significantly
1.4 Net margins surge to their highest level since 2007
2 OPERATING CYCLE ANALYSIS
2.1 Mounting sundry debtors raise questions on revenue growth quality
2.2 Fluctuating sundry creditors drops in 2011
2.3 Debtor days vs. Creditor days gap widens
3 SOLVENCY
3.1 Liquidity concerns as Quick Ratio rises
3.2 Pure-play LPO companies start deleveraging as profits rise
4 EFFICIENCY
4.1 Return on Capital Employed declines but remains at a healthy level
4.2 ROE surges past 2007 levels after a significant fall in 2008
4.3 ROA of medium sized LPOs bounces back to take top spot
4.4 DuPont Analysis
5 COMPANY PROFILES
5.1 Acumen Legal Services
5.2 Amatra Legal Services
5.3 Atlas Legal
5.4 Bodhi Global
5.5 Clairvolex
5.6 Cobra Legal
5.7 Exactus
5.8 iBridge Solutions
5.9 Integreon
5.10 Intellevate
5.11 KLexserve
5.12 Legasis
5.13 Lexadigm
5.14 MindCrest
5.15 Pangea3
5.16 Quislex
5.17 SDD Global
5.18 TT Consultants
5.19 Tusker Legal
5.20 UnitedLex
6 APPENDIX
