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Firstsource Solutions Ltd (FSL)

Information Technology · IT - Software · NSE · Updated 12 September 2026
By StockFin Research Team • AI-Assisted Analysis • Source: BSE/NSE Filings
₹247.7 ↓ 32.68% (1Y)

🎯 Key Takeaways

  • Firstsource Solutions is in a strategic transition phase, navigating short-term revenue volatility from client churn while actively reinvesting in AI-driven services and targeting long-term margin expansion to 14-15%. Management maintains confidence in growth from a robust pipeline and new large deals, particularly in healthcare, which now represents one-third of recent wins.
  • Revenue grew 5.5% QoQ to ₹2,725 in Q1FY27.
  • ⚠️ Dependence on large enterprise contracts, particularly in healthcare, introduces client concentration risk, as evidenced by the recent INR 271 million
Market Cap
₹17,264
P/E Ratio
25.5
P/B Ratio
3.94
ROE
15.3%
ROCE
16.5%
Debt/Equity
0.44
Div Yield
2.22%
Promoter
53.7%
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📖 The Story

Firstsource Solutions is in a strategic transition phase, navigating short-term revenue volatility from client churn while actively reinvesting in AI-driven services and targeting long-term margin expansion to 14-15%. Management maintains confidence in growth from a robust pipeline and new large deals, particularly in healthcare, which now represents one-third of recent wins.

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📰 What's Happening

In Q1 FY27, Firstsource reported $288 million in revenue (up 22.9% YoY, 5.5% QoQ) and EBIT margin of 12.4%, up 110 bps. Adjusted net profit reached INR 2.2 billion, though offset by INR 271 million in exceptional charges from a healthcare client contract termination. Management reaffirmed FY27 guidance of 10-13% revenue growth and 12.25-12.75% margin, citing strong new deal momentum and a strategic shift toward AI-driven offerings.

Source: Stock Announcements

📊 Quarterly Results (₹ Cr)

MetricSep 2025Dec 2025Mar 2026Jun 2026
Revenue2,3122,4432,5832,725
Operating Profit266291314337
OPM %11.5%11.9%12.2%12.4%
Net Profit180120205166
EPS₹2.60₹1.74₹2.97₹2.40

Revenue has grown sequentially for four consecutive quarters, from ₹2,312 crore in Sep 2025 to ₹2,725 crore in Jun 2026, indicating sustained demand despite macro pressures. However, YoY growth has moderated from prior highs, aligning with management's commentary on temporary headwinds from client churn. Operating margins have expanded consistently, rising from 11.5% to 12.4%, reflecting cost discipline and improved utilization, even as exceptional charges impacted net profit in Q1.

🔮 Management Outlook & What's Next

Management expressed confidence in long-term margin expansion to 14-15% and sustained growth through AI-led service differentiation and new large deals, particularly in healthcare. The company emphasized that the termination of a single healthcare client, while causing a short-term revenue dip, would not derail its strategic trajectory, and that the pipeline remains robust with multiple multi-year contracts in advanced stages.

Extracted from official company announcements. Not StockFin.ai's opinion.

🏦 Balance Sheet (₹ Cr)

ItemMar 2025Mar 2025Mar 2026Mar 2026
Equity Capital697697697697
Reserves3,2023,4013,6693,688
Borrowings2,2522,5692,3691,937
Total Liabilities7,3997,9228,3219,320
Fixed Assets9291,1891,1825,567
Investments3573103116
Total Assets7,3997,9228,3219,320

The balance sheet shows stable equity of ₹697 crore and reserves growing from ₹3,401 crore in Mar 2025 to ₹3,688 crore in Mar 2026, indicating retained earnings are being reinvested. Borrowings have declined from ₹2,569 crore to ₹1,937 crore over the same period, suggesting active deleveraging. Total assets have risen steadily to ₹9,320 crore, reflecting investments in capacity and capabilities to support growth.

💰 Cash Flow Statement (₹ Cr)

ItemMar 2026
Operating+1,214
Investing-452
Financing-667
Net Cash Flow+95

👥 Shareholding Pattern

CategoryQ2FY26Q3FY26Q4FY26Q1FY27
Promoters53.7%53.7%53.7%53.7%
FII9.3%9.2%8.9%8.4%
DII24.6%25.2%25.5%25.4%
Public9.8%9.4%9.4%10.0%
# Shareholders2,40,9822,30,4722,29,9352,42,813

FII and DII holdings have remained relatively stable over the last four quarters, with FII ownership hovering around 8-9% and DII at approximately 25%. Promoter holding is unchanged at 53.66%. The number of public shareholders has slightly increased, from 2,29,935 to 2,42,813, indicating broader retail participation and reduced concentration risk.

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⚖️ Peer Comparison — IT - Software

Company MCap (₹ Cr) P/E ROCE ROE D/E
TCS 7.97 L Cr 16.0 63.2% 46.7% 0.00
INFY 4.21 L Cr 14.0 44.9% 32.7% 0.00
HCLTECH 3.28 L Cr 18.8 31.6% 23.2% 0.00
WIPRO 1.66 L Cr 13.3 18.1% 15.1% 0.19
TECHM 1.51 L Cr 26.6 24.8% 17.4% 0.00
LTM 1.28 L Cr 24.4 30.5% 21.6% 0.00
OFSS 1.02 L Cr 30.0 60.3% 43.6% 0.00
PERSISTENT 87,353 45.0 32.7% 24.5% 0.00
COFORGE 81,783 37.5 25.6% 20.7% 0.04
MPHASIS 43,788 22.9 22.3% 17.8% 0.17

🔗 Peer Stock Analyses

⚠️ Risk Factors

1. Dependence on large enterprise contracts, particularly in healthcare, introduces client concentration risk, as evidenced by the recent INR 271 million exceptional charge from a single client termination. 2. Margin expansion relies on operational efficiency and AI-driven service adoption, which may take time to scale and could face cost pressures from wage inflation or competition. 3. Revenue growth has moderated to 22.9% YoY from prior quarters, raising concerns about sustainability if macro conditions or large deal cycles weaken.

📋 Recent Filings

🧠 Analyst's Read

Firstsource is executing a deliberate transformation toward higher-margin, AI-integrated services, with improving operational metrics and disciplined capital allocation. The near-term challenge is sustaining growth amid client churn, but the long-term thesis hinges on successful execution of its strategic shift and margin trajectory toward 14-15%. Investors should monitor the pace of new deal wins and healthcare segment recovery in the coming quarters.

Based on filing content and financial data. Not a recommendation.

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Data sourced from stock announcements. Analysis generated by StockFin.ai.
For informational purposes only — not investment advice. Updated 2026-09-12.

Editorial & Data Transparency Notice

This analysis was programmatically compiled using StockFin AI utilizing official regulatory disclosures from the BSE and NSE. Content is automatically synthesized and audited against public financial filings. StockFin.ai is an educational research platform and is NOT a SEBI-registered investment advisor or research analyst.

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