Check Before You Invest : Firstsource Solutions Ltd

Q: 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: Is Firstsource Solutions Ltd a good quality company?

Firstsource Solutions Ltd is a good quality company, based on a consistently good multi-year financial track record. This assessment is based on company’s performance on Revenue growth, ROCE, Equity and Assets, key margin ratios, cash conversion cycle, and debt to cash flow from operations and how it compares with its long term averages.

Q: Is Firstsource Solutions Ltd undervalued or overvalued?

Firstsource Solutions Ltd appears Somewhat overvalued, as its key valuation ratios are higher than their past averages. Based on the industry it operates in, the relevant valuation ratios include one of the following, P/E, P/BV, P/Sales, EV/EBITDA or a combination of two or more. Valuation Ratios. Price to Earnings, Current: 49.57, Historic Median: 43.05. Price to Book, Current: 9.83, Historic Median: 5.59. Price to Sales, Current: 7.43, Historic Median: 8.49. EV to EBITDA, Current: 23.86, Historic Median: 24.73

Q: Is Firstsource Solutions Ltd a good buy now?

Firstsource Solutions Ltd is a good buy now, based on strong price trend analysis suggesting prices may rise. However, you need to check its quality and valuation before making a decision

Q: Revenue growth of Firstsource Solutions Ltd?

Firstsource Solutions Ltd revenue growth is 25% for FY-2026, which is above its 5-year CAGR of 16.83%, indicating faster growth.

Q: Gross Profit margin of Firstsource Solutions Ltd?

Firstsource Solutions Ltd Gross profit margin which is the profit after deduction of direct costs, is 29.4% for FY-2026, which is in line with its 5-year median of 29.4%, indicating stable margins.

Q: Operating Profit Margin of Firstsource Solutions Ltd?

Firstsource Solutions Ltd Operating Profit Margin which is the profit after deduction of all operating costs, is 30.08% for FY-2026, which is above its 5-year median of 28.27% indicating increasing margins.

Q: Net Profit Margin of Firstsource Solutions Ltd?

Firstsource Solutions Ltd Net Profit Margin is 14.99% for FY-2026, is below its 5-year median of 18.51%, indicating decreasing margins. Profitability Metrics. Gross Profit Margin (%), Current: 29.4, Historic Median: 29.4. Operating Profit Margin (%), Current: 30.08, Historic Median: 28.27. Net Profit Margin (%), Current: 14.99, Historic Median: 18.51

Q: Return on Asset of Firstsource Solutions Ltd?

Firstsource Solutions Ltd Return on Asset is 11.62%, which is below its 5-year historical median of 12.76%, indicating deteriorated asset utilization efficiency.

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

Firstsource Solutions Ltd Return on capital employed is 22.32% for FY-2026, which is above its 5-year historical median of 20.95%. The current ROCE is above its estimated weighted average cost of capital (WACC) of 13.5%, indicating value creation.

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 multi-year financial track record.

This assessment is based on company’s performance on Revenue growth, ROCE, Equity and Assets, key margin ratios, cash conversion cycle, and debt to cash flow from operations and how it compares with its long term averages.

Q.3 Is Firstsource Solutions Ltd undervalued or overvalued?

Firstsource Solutions Ltd appears Somewhat overvalued, as its key valuation ratios are higher than their past averages.

Based on the industry it operates in, the relevant valuation ratios include one of the following, P/E, P/BV, P/Sales, EV/EBITDA or a combination of two or more.

Valuation Ratios	Current	5-year Historic Median
Price to Earnings	49.57	43.05
Price to Book	9.83	5.59
Price to Sales	7.43	8.49
EV to EBITDA	23.86	24.73

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

Firstsource Solutions Ltd is a good buy now, based on strong price trend analysis suggesting prices may rise. However, you need to check its quality and valuation before making a decision

Performance Analysis

We have analysed the performance of the company on the following:

How has it performed on generating Profits?
By checking its Revenue growth, Gross, Operating and Net Margins compared to its last 5-year median.
How efficiently has it utilized Capital?
By checking its ROCE, ROA, ROE and its Cash Conversion Cycle.
How is it managing its Debt?
By checking its Debt to Equity and Cash Flow from Operations.

A: What are the trends in revenue and profit margins?

Q.1 Revenue growth of Firstsource Solutions Ltd?

Firstsource Solutions Ltd revenue growth is 25% for FY-2026, which is above its 5-year CAGR of 16.83%, indicating faster growth.

Q.2 Gross Profit margin of Firstsource Solutions Ltd?

Firstsource Solutions Ltd Gross profit margin which is the profit after deduction of direct costs, is 29.4% for FY-2026, which is in line with its 5-year median of 29.4%, indicating stable margins.

Q.3 Operating Profit Margin of Firstsource Solutions Ltd?

Firstsource Solutions Ltd Operating Profit Margin which is the profit after deduction of all operating costs, is 30.08% for FY-2026, which is above its 5-year median of 28.27% indicating increasing margins.

Q.4 Net Profit Margin of Firstsource Solutions Ltd?

Firstsource Solutions Ltd Net Profit Margin is 14.99% for FY-2026, is below its 5-year median of 18.51%, indicating decreasing margins.

	Current Level	5-year Historic Median
Gross Profit Margin (%)	29.4	29.4
Operating Profit Margin (%)	30.08	28.27
Net Profit Margin (%)	14.99	18.51

B: Does the business utilize capital efficiently?

Q.5 Return on Asset of Firstsource Solutions Ltd?

Firstsource Solutions Ltd Return on Asset is 11.62%, which is below its 5-year historical median of 12.76%, indicating deteriorated asset utilization efficiency.

Q.6 Return on capital employed (ROCE) of Firstsource Solutions Ltd?

Firstsource Solutions Ltd Return on capital employed is 22.32% for FY-2026, which is above its 5-year historical median of 20.95%. The current ROCE is above its estimated weighted average cost of capital (WACC) of 13.5%, indicating value creation.

Q.7 Return on Equity (ROE) of Firstsource Solutions Ltd?

Firstsource Solutions Ltd Return on equity is 18.63% for FY-2026, which is above its 5-year historical median of 17.57%, indicating the business is making better use of its shareholders capital.

Q.8 Cash conversion cycle of Firstsource Solutions Ltd?

Firstsource Solutions Ltd Cash conversion cycle is 112 days, in line with its 5-year historical median of 112 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 (x)	0.78	0.66
ROE (%)	18.63	17.57
ROCE (%)	22.32	20.95
Cash Conversion Cycle	112 days	112 days

C: How much debt does the business have and is it at a sustainable level?

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

Firstsource Solutions Ltd Debt-to-Equity ratio is 0.14, which is above the industry average of 0.05, indicating higher 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

D: Promoter shareholding and pledge status of Firstsource Solutions Ltd?

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)

E: How does Firstsource Solutions Ltd performance compare with that of its Peers?

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

Firstsource Solutions Ltd revenue CAGR is 16.83%, compared to the industry median CAGR of 5%, indicating faster growth and gaining its market share.

Profit Metrics

	Current Level	5-year Industry Median
Revenue Growth (%)	25	5
Gross Profit Growth (%)	40.1	11
Operating Profit Growth (%)	42.2	11.9
Net Profit Growth (%)	1.2	8.3

Operating Efficiency

	Current Level	5-year Industry Median
Asset Turnover (x)	0.78	0.72
ROE (%)	18.63	10.43
ROCE (%)	22.32	15.4
Cash Conversion Cycle (days)	112.1	38

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 20.1% based on the current price.

	9Y	5Y	3Y	1Y
Share Price CAGR	20.1%	9.2%	27.1%	-10.9%

Q.2 Valuation ratios of Firstsource Solutions Ltd vs historical?

The current P/E ratio of 49.57 is higher than its historical median of 43.05, indicating that the stock is trading above its historical average valuation.

Q.3 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	49.57	43.05	29.72
Price to Book	9.83	5.59	2.75
Price to Sales	7.43	8.49	4.18
EV to EBITDA	23.86	24.73	15.58

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Check Before You Invest : Firstsource Solutions Ltd

Snapshot

Performance Analysis

Ownership & governance

Peer comparison (industry-wise, mcap)

Profit Metrics

Operating Efficiency

Valuation & price assessment

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