Earnings Outlook
Firstsource Solutions Apr-Jun PAT seen up on big deals
This story was originally published at 22:16 IST on 29 July 2025
Register to read our real-time news.Informist, Tuesday, Jul. 29, 2025
By Muskan Lodhi
MUMBAI – Firstsource Solutions Ltd. is expected to post robust on-year growth in both its top line and bottom line for the June quarter despite only marginal sequential growth due to the high base effect, according to brokerages tracking the company. The addition of new clients and multiple big deals in the trailing quarter and the company's decision to align with strategic priorities despite a volatile macroeconomic environment are seen to be key growth levers for the quarter.
The company's consolidated net profit for the quarter is estimated at INR 1.71 billion, up 6.2% sequentially and 26.2% on year, according to the average of estimates from five brokerages. The highest estimate for the company's net profit is INR 1.78 billion from Emkay Global Financial Services Ltd. and the lowest is INR 1.67 billion from Antique Stock Broking Ltd.
The company is expected to report a consolidated revenue of INR 22.03 billion, up marginally from the trailing quarter and 23% from a year ago. The highest estimate for the company's revenue is INR 22.36 billion from Emkay Global and the lowest is INR 21.82 billion from Antique Stock. The company has guided that it expects its revenue to grow 12-15% in constant currency terms in the financial year 2025-26 (Apr-Mar). Out of this, 3% is estimated to come from inorganic growth, primarily from the acquisition of Accunai India Services.
In the trailing quarter, the business process manager had secured five large deals and added seven new clients. The company has signed a five-year business process-as-a-service contract with a mid-market health plan provider in North America, its largest-ever healthcare deal. Business process as a service is a cloud-based model for outsourcing business processes. The company expects all industry segments to experience healthy growth, but healthcare is expected to provide significant momentum, BoB Capital Markets Ltd. said.
Firstsource Solutions is expected to post a consolidated earnings before tax, depreciation, and amortisation of INR 3.44 billion, up over 27% on year but only 3.3% sequentially. The highest estimate for EBIDTA is INR 3.52 billion from Emkay Global and the lowest is INR 3.38 billion from Antique Stock. Firstsource expects its EBIT margin for FY26 to be 11.25-12.00%. The company also wants to improve its EBIT margin by 75 basis points every year until it reaches the industry average range of 14-15%.
The company's margin improvement strategy includes moving more work offshore to cut costs, using artificial intelligence and automation to improve delivery, reducing low-margin accounts, cutting down on attrition and facility costs, and better pricing in new contracts.
The key metrics to monitor when the company announces its results Wednesday are revenue growth against the 12-15% growth guidance in constant currency, impact of generative artificial intelligence on growth prospects, and demand trends in the financial services, healthcare, communication, media, and technology verticals.
Tuesday, the company's shares closed at INR 330 on the National Stock Exchange, down marginally from Monday's close. The shares are down 6% from when the company had announced its March quarter earnings.
Of the eight research reports on the stock available with Informist, four have a "buy" recommendation on the stock with an average target price of INR 376, two have a "hold" recommendation, and two have a "sell" recommendation.
Following are the Apr-Jun consolidated earnings estimates for Firstsource Solutions Ltd., in INR million, based on reports from five brokerages in descending order of net profit:
Brokerage | Net Sales | Net Profit | EBIDTA |
Emkay Global Financial Services Ltd. | 22,357.00 | 1,779.00 | 3,518.00 |
Anand Rathi Share and Stock Brokers Ltd. | 22,099.00 | 1,705.00 | 3,438.00 |
Nuvama Wealth Management Ltd. | 22,022.00 | 1,694.00 | 3,413.00 |
Dolat Capital Market Pvt. Ltd. | 21,854.00 | 1,687.00 |
|
Antique Stock Broking Ltd. | 21,821.00 | 1,669.00 | 3,382.00 |
Average | 22,030.60 | 1,706.80 | 3,437.75 |
End
Edited by Rajeev Pai
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