Firstsource Solutions Limited (FSL)
Small CapServices stocks · Small cap · NSE
Firstsource Solutions is a specialized BPS partner established in 2001, part of RP-Sanjiv Goenka Group. It serves 200+ global clients across Banking & Financial Services, Healthcare, Communications, Media & Technology, Retail, and Utilities. With 36,205 employees globally, FY26 revenue was INR 95.6 Billion (US$1,082 Million).
One read, four checks
75+ is strong, 60-74 is usable, 45-59 is mixed, and below 45 needs caution. These are research lenses, not buy/sell instructions.
Mixed fundamentals, management trust is acceptable, price trend argues for patience, and recent execution is mixed.
Fundamental lens: valuation, quality, growth, balance sheet, and cash flow.
medium confidence · 4/4 claims checked
Timing lens: price trend and sector relative strength.
Rolling lens: recent quarterly delivery, not the latest single-result score.
Quarter ended 30 Jun 2026
Bad · 25/100PAT -2% YoY · Rev +23% YoY · margin expansion · +6% QoQ
| Metric | This quarter | YoY | QoQ |
|---|---|---|---|
| Revenue | ₹2,725 Cr | +22.9% | +5.5% |
| EBITDA | ₹451 Cr | +30.0% | +4.9% |
| Operating margin | 17.0% | +100 bps | +0 bps |
| PAT | ₹166 Cr | -1.8% | -19.0% |
| PAT margin | 6.1% | -153 bps | -185 bps |
NDF means not disclosed in the current structured filing feed. It is intentionally not treated as zero.
Business & thesis
Growth engines, tailwinds/headwinds, and risk radar from management commentary
Business & thesis
Growth engines, tailwinds/headwinds, and risk radar from management commentary
Where growth can come from, and what can break the case
FSL reported strong Q4FY26 and FY26 results. Q4 revenue grew 19.5% YoY (11.6% CC) to INR 25.8B, with EBIT up 29.8% YoY to INR 3.1B (12.2% margin). FY26 revenue rose 19.7% YoY (13.6% CC) to INR 95.6B, and EBIT increased 27.4% YoY to INR 11.2B (11.7% margin), expanding margins.
The company delivered robust growth in FY26, with strong Q4 performance across revenue and profitability. Margin expansion and significant deal wins indicate healthy business momentum. The FY27 guidance suggests continued double-digit constant currency revenue growth and stable to improving EBIT margins, supporting the current investment thesis.
Revenue by Vertical (Q4FY26)
Latest issuer-disclosed distribution across 4 reported categories.
Client Experience Transformation
Won a large deal from a global leader in financial technology solutions in the US to redesign and transform their customer experience.
Expansion with Existing Clients
Expanded relationship with a leading mortgage lender and servicer in the US for support services.
New Logo Acquisition
Secured new logos including a leading global media and publishing company and a UK-based utilities company for CX and sales support.
Digital Collections
Won a deal from a leading receivables management company in the US for digital collections.
Employee Base
Total headcount was 36,205 employees in Q4FY26, a net addition of 1,554 YoY, but a net reduction of 484 QoQ.
Strong Deal Wins
Secured multiple large deals and expanded existing client relationships across key verticals and geographies in Q4FY26.
Margin Expansion
EBIT margin expanded by 100bps YoY in Q4FY26 and 70bps YoY for FY26, indicating operational efficiency.
Employee Attrition
TTM employee attrition increased to 29.7% in Q4FY26 from 27.4% in Q3FY26.
Manpower Expenses
Manpower expenses grew 9.3% YoY in Q4FY26 and 11.9% YoY for FY26, outpacing QoQ revenue growth.
Intense Competition
The company operates in an intense BPS market, which may affect its cost advantage.
Client Concentration
Client concentration remains a risk, with top 5 clients contributing 28.0% of total revenues in Q4FY26.
Wage Increases
Wage increases are identified as a risk that could impact profitability.
Reduced Demand in Key Verticals
Reduced demand in key focus verticals is a risk that could affect future growth prospects.
Management accountability
What management said, and what results must prove
Management accountability
What management said, and what results must prove
What management said, and what results must prove
Issuer guidance and extracted claims are tracked against later reported outcomes. Treat these as management statements, not IndiaPulse forecasts.
YoY comparison is crucial for assessing overall growth and annual performance trends. QoQ comparison is relevant for tracking sequential momentum in revenue, margin expansion, and operational metrics like headcount and client additions, especially in a services business.
TTM Employee Attrition
UNDER_STRESSTTM employee attrition stood at 29.7% in Q4FY26, an increase from 27.4% in Q3FY26.
New Client Logos Added (QoQ)
The company added 11 new logos in Q4FY26, up from 9 in Q3FY26.
Strategic Logos Added (QoQ)
6 strategic logos were added in Q4FY26, an increase from 5 in Q3FY26.
Top 5 Client Concentration
Revenue share from top 5 clients decreased to 28.0% in Q4FY26 from 28.1% in Q3FY26, indicating reduced concentration.
FY27 Revenue Growth Guidance
Management expects 10-13% constant currency revenue growth for FY27.
FY27 EBIT Margin Guidance
Management guides for an EBIT margin of 12.25-12.75% for FY27.
Numbers and claims to verify in the next filings
| Checkpoint | Current evidence | What to verify next |
|---|---|---|
| FY27 Constant Currency Revenue Growth | 13.6% for FY26 | Achievement within the 10-13% guidance range for FY27. |
| FY27 EBIT Margin | 11.7% for FY26 | Achievement within the 12.25-12.75% guidance range for FY27. |
| TTM Employee Attrition | 29.7% in Q4FY26 | Stabilization or reduction in attrition rates to manage talent costs and delivery. |
| New and Strategic Client Additions | 11 new, 6 strategic in Q4FY26 | Continued momentum in winning new logos and expanding strategic client relationships. |
Verification checkpoints are IndiaPulse research interpretation, not investment advice.
Show extracted source claims
The company has a stated objective of 50-75 bps margin expansion every year.
"our stated objective of a 50-75 bps margin expansion every year"
Outcome check: OPM moved from 16.0% to average 16.5% (+0.5 pp).
Growth in the diverse portfolio (UK utilities and retail) is expected to remain modest in the coming quarters.
"we expect the growth in this portfolio to remain modest in the coming quarters"
Outcome check: Revenue YoY averaged 17.9% across 2 later quarter(s).
We are confident of an accelerating growth trajectory in the healthcare vertical over the second half of FY26.
"confident of an accelerating growth trajectory in this vertical over the second half of FY26"
Outcome check: Revenue YoY averaged 17.9% across 2 later quarter(s).
We are confident in sustaining broad-based growth in the coming quarters in the banking and financial services vertical.
"giving us confidence in sustaining broad-based growth in the coming quarters in this vertical"
Outcome check: Revenue YoY averaged 17.9% across 2 later quarter(s).
Trend score and candlestick chart
39BearishSMA20 -3.7% / mo · MACD −
Technical chart
FSLdaily · 1Y · AUTO+18.5%Daily technical trend read
Bearish setupTrend is weak — long-term trend down. RSI 44.
- Price below SMA200 (long-term downtrend) — short-term bounces likely countertrend.
- SMA20 falling (~3.8% over last month) — short-term momentum negative.
- RSI(14) at 44 — falling, no extreme reading.
- MACD below signal but histogram contracting — bearish momentum easing.
- 30% off 52W high · 31% above 52W low.
Mechanical read from the price + indicator series above. Not a recommendation — technical setups can reverse without warning, especially around earnings and macro events.
Relative Strength & Trend Stage
- 29.6% below the 52-week closing high after prior strength.
- The 30-week proxy has stalled (-2.2% over 20 sessions).
- Price has not yet confirmed a full Stage 4 downtrend.
Valuation & score drivers
U-Score 47 · FAIR VALUE · pillar breakdown, sector model, fair-value anchor
Valuation & score drivers
U-Score 47 · FAIR VALUE · pillar breakdown, sector model, fair-value anchor
Fundamental score breakdown
FAIR VALUEWhy this score?
Top U-Score contributors and drags from the latest stored fundamentals.
Positive drivers
- FCF yield is supportive at 4.1%.
- Piotroski is strong at 8/9.
- Fair-value margin of safety is positive at 10.8%.
Main drags
- Valuation is weaker at 4/30; verify the latest quarterly trend.
- Growth is weaker at 10/25; verify the latest quarterly trend.
- Quality is weaker at 12/20; verify the latest quarterly trend.
Blended valuation: PE, EV/EBITDA, FCF yield, and balance-sheet checks
For this sector, IndiaPulse uses a blended lens rather than relying on a single valuation ratio.
Stored run vs live recompute
This shows the stored score trend when snapshots exist, and also compares the latest stored nightly score with a live recompute from current fundamentals and price.
Score history
12 stored score snapshots. Latest stored move: +3 points.
Factor attribution
Modelled fair value
Trust score
Does management behaviour match later outcomes? Claim delivery, forensic breakdown, evidence depth
Trust score
Does management behaviour match later outcomes? Claim delivery, forensic breakdown, evidence depth
Trust asks: does management behaviour match later outcomes? Higher is better, but confidence and evidence depth matter as much as the number.
Mixed Trust: Management has 75% delivered/partly-delivered outcomes on 4 checked claims, with 1 adverse claim outcome. It ranks around the 45th percentile of the scored universe and 50th percentile within Services. No major sub-score weakness stands out.
Healthy Trust: 4/4 extracted management claims have outcome checks; 50% were fully delivered and 1 were partially delivered. 1 claim(s) were contradicted or failed.
Usable, but needs evidence. Treat guidance with a margin of safety.
overall median 67 · Services: 50th pctile, median 66 · Small: 50th pctile, median 66
4/4 claims checked. Use as directional, not final.
4/4 claims checked · 1 contradicted/failed claim
How to read this Trust Score
Mixed Trust · medium confidenceRead Trust alongside U-Score, result consistency, and technical trend. A cheap stock with weak Trust needs a larger margin of safety; a high Trust score does not make an expensive stock attractive by itself.
Forensic breakdown
Read low sub-scores as due-diligence warnings, not automatic sell signals.
Trust positives
- ▸Promoter pledge is zero.
- ▸FCF yield is positive at 4.1%.
- ▸10 years of positive FCF.
- ▸4/4 latest quarters had positive YoY revenue growth.
Trust risks
- ▸1 of the latest 4 quarters had PAT decline worse than 25% YoY.
Financials
Full fundamentals table and 10-year revenue / profit / ROE history
Financials
Full fundamentals table and 10-year revenue / profit / ROE history
Fundamentals
Valuation
- P/E
- 23.40
- P/B
- 4.26
- EV/EBITDA
- 10.24
- Market Cap
- 18694.00Cr
Profitability
- ROE
- 17.60%
- ROCE
- 16.80%
- ROA
- 7.35%
- Dividend Y
- 2.08%
Growth (CAGR)
- Revenue 5Y
- 13.00%
- EPS 5Y
- 10.00%
- Revenue 3Y
- 17.00%
- EPS 3Y
- 14.00%
Balance Sheet
- Debt/Equity
- 0.67
- Interest Coverage
- 8.74×
- Altman Z
- 4.80
- Book Value
- 62.00
Cash Flow
- FCF Yield
- 4.12%
- FCF Positive Y
- 10/5
- OCF
- 1214.00 Cr
- EPS TTM
- 9.49
Shareholding
- Promoter Hold
- 53.66%
- Promoter Pledge
- 0.00%
- Momentum 52W
- 35%
Financial History
Updated 5/9/2026
Revenue
₹ CrNet Profit
₹ CrReturn on Equity
%Peers
Business-comparable names in Services, ranked by similarity
Peers
Business-comparable names in Services, ranked by similarity
Peers
Business-comparable peers in Services — ranked by industry, sub-sector, theme-tag overlap, market cap, and U-Score similarity. Green cells mark the best available peer metric in this table.