Check Before You Invest : Firstsource Solutions Ltd

BSE: 532809 NSE: FSL ISIN: INE684F01012

| Sector: IT & ITES | Industry: BPO/ITeS

Snapshot

Q.1 Which industry/sub-sector does Firstsource Solutions Ltd belong to?

Firstsource Solutions Ltd belongs to the IT & ITES sector, operating specifically within the BPO/ITeS segment.

Q.2 Is Firstsource Solutions Ltd a good quality company?

Firstsource Solutions Ltd is a good quality company, based on a consistently good 10-year financial track record.

Q.3 Is Firstsource Solutions Ltd undervalued or overvalued?

Firstsource Solutions Ltd appears Fair, as its key valuation ratios are in line with their past averages.

Q.4 Is Firstsource Solutions Ltd a good buy now?

Firstsource Solutions Ltd is a neutral opportunity now, based on stable price trend analysis suggesting prices may move sideways. However, you need to check its quality and valuation before making a decision

Performance Analysis

Q.1 Revenue growth of Firstsource Solutions Ltd?

Firstsource Solutions Ltd revenue growth is 44.1% for FY-2025, which is above its 5-year CAGR of 19.67%, indicating faster growth.

Q.2 Return on capital employed (ROCE) of Firstsource Solutions Ltd?

Firstsource Solutions Ltd Return on capital employed is 22.05% for FY-2025, which is above its 5-year historical median of 20.69%. The current ROCE is above its estimated weighted average cost of capital (WACC) of 11.25%, indicating value creation.

Q.3 Return on Asset of Firstsource Solutions Ltd?

Firstsource Solutions Ltd Return on Asset is 13.79%, which is in line with its 5-year historical median of 13.79%, indicating stable asset utilization efficiency.

Q.4 Return on Equity (ROE) of Firstsource Solutions Ltd?

Firstsource Solutions Ltd Return on equity is 17.66% for FY-2025, which is in line with its 5-year historical median of 17.47%, indicating the business is making similar use of its shareholders capital.

Q.5 Cash conversion cycle of Firstsource Solutions Ltd?

Firstsource Solutions Ltd Cash conversion cycle is 106 days, in line with its 5-year historical median of 109 days, indicating stable working capital management. However, you need to compare this with its peers in the industry.

	Current Level	5-year Historic Median
Asset Turnover	0.74	0.64
ROE	17.66	17.47
ROCE	22.05	20.69
Cash Conversion Cycle	106 days	109 days

Q.6 Gross Profit margin of Firstsource Solutions Ltd?

Firstsource Solutions Ltd Gross profit margin which is the profit after deduction of direct costs, is 26.2% for FY-2025, which is below its 5-year median of 29.5%, indicating decreasing margins.

Q.7 Operating Profit Margin of Firstsource Solutions Ltd?

Firstsource Solutions Ltd Operating Profit Margin which is the profit after deduction of all operating costs, is 26.32% for FY-2025, which is below its 5-year median of 28.27% indicating decreasing margins.

Q.8 Net Profit Margin of Firstsource Solutions Ltd?

Firstsource Solutions Ltd Net Profit Margin is 18.51% for FY-2025, is below with its 5-year median of 19.97%, indicating decreasing margins.

	Current Level	5-year Historic Median
Gross Profit Margin	26.2	29.5
Operating Profit Margin	26.32	28.27
Net Profit Margin	18.51	19.97

Q.9 Debt to Equity ratio of Firstsource Solutions Ltd?

Firstsource Solutions Ltd Debt-to-Equity ratio is 0.10, which is lower with the industry average of 0.17, indicating lower debt levels in the industry.

Q.10 Debt to cash flow from operations of Firstsource Solutions Ltd?

Firstsource Solutions Ltd Debt to cash flow from operations is 0.49, which is at a healthy level.

Ownership & governance

Q.1 Promoter shareholding and pledge status of Firstsource Solutions Ltd?

Promoters hold 53.66% of the Firstsource Solutions Ltd, with 0.00% of their stake pledged, indicating no pledge risk.

Peer comparison (industry-wise, mcap)

Q.1 Revenue growth of Firstsource Solutions Ltd vs industry peers?

Firstsource Solutions Ltd revenue CAGR is 19.67%, compared to the industry median CAGR of 10.13%, indicating faster growth and gaining its market share.

Profit Metrics

	Current Level	5-year Industry Median
Revenue Growth	44.1	10.1
Gross Profit Growth	28	10.8
Operating Profit Growth	33.9	NAN
Net Profit Growth	33.4	8.5

Operating Efficiency

	Current Level	5-year Industry Median
Asset Turnover	0.74	0.72
ROE	17.66	10.43
ROCE	22.05	15.4
Cash Conversion Cycle (days)	105.66	45

Valuation & price assessment

Q.1 Stock return of Firstsource Solutions Ltd over the last decade?

Over the last 9 year(s), the stock has delivered a CAGR of 18.4% based on the current price.

Q.2 What return has the stock given over the last decade?

	9Y	5Y	3Y	1Y
Share Price CAGR	18.4%	11.8%	23%	-36%

Q.3 Valuation ratios of Firstsource Solutions Ltd vs historical?

The current P/E is lower that its historical median.

Q.4 How do the current valuation ratios compare with 5-year historical median and industry numbers?

Valuation Ratios	Current	5-year Historic Median	5-year Industry Median
Price to Earnings	39.45	42.00	30.41
Price to Book	5.62	5.48	2.76
Price to Sales	5.41	8.65	4.20
EV to EBITDA	18.5	25.25	15.56

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