Firstsource Solutions (FSL) Q1 26/27 earnings summary

Executive summary

• Q1 FY27 revenue reached INR 27.2 billion (₹27,249 million/$288 million), up 22.9% year-on-year and 5.5% quarter-on-quarter, marking the ninth consecutive quarter of double-digit YoY growth.

• EBIT grew 34.8% year-on-year to INR 3,367 million, with margin expansion to 12.4%.

• Adjusted net profit was INR 2.2 billion (₹2,222 million), up 31.2% year-on-year and 8.3% sequentially; diluted EPS was INR 2.36.

• Four large deals were signed, maintaining a streak of four or more large deals for six consecutive quarters, and twelve new logos were added, including three strategic ones.

• Continued strong client demand for AI-enabled transformation, with notable wins across healthcare, BFS, CMT, utilities, and retail, and a healthy pipeline across geographies.

Financial highlights

• Revenue grew 22.9% year-on-year and 5.5% quarter-on-quarter to INR 27.2 billion (₹27,249 million/$288 million).

• EBIT margin improved to 12.4%, up 110 basis points year-on-year and 20 basis points sequentially; EBIT was INR 3,367 million, up 34.8% year-on-year.

• Adjusted net profit margin was 8.2% of revenue; PAT (excluding exceptional items) was INR 2,222 million, while reported PAT was INR 1,659 million due to exceptional charges.

• Exceptional items for the quarter included contract termination, regulatory indemnification, and fair value adjustment on contingent consideration, totaling INR 717 million.

• Operating cash flow for Q1FY27 was INR 3,556 million; net debt increased to INR 17.1 billion.

Outlook and guidance

• FY27 guidance reaffirmed: 10%-13% constant currency revenue growth and EBIT margin of 12.25%-12.75%.

• Long-term aspiration to reach 14%-15% EBIT margin over the next two to three years.

• Pipeline remains robust, with large deals ramping and continued new logo momentum expected to offset any revenue impact from program terminations.