Firstsource Solutions (FSOL IN) – Q2FY27 Result Update – Growth outlook improves, margin trajectory intact – BUY
Published on 29 Oct 2026
Management expects H2FY27 to outperform H1, supported by large-deal ramp-ups, strong hiring, improving conversion and robust pipeline. Accordingly, the company raised the lower end of its FY27 CC rev. growth guidance to 10.5% from 10% earlier, retaining the upper end at 13%, while maintaining EBIT margin guidance of 12.25–12.75%. EBIT margin expanded 10bps QoQ to 12.5% despite the first phase of wage hikes and costs of onboarding employees ahead of revenue. Continued offshore/nearshore delivery, AI-led productivity and operating efficiencies support the margin trajectory towards FSOL’s medium-term aspiration of 15%. With strong H1 execution and improving growth visibility, we raise our FY27E/FY28E revenue CC growth estimates to 11.5%/10.9% from 11.1%/10.5%, respectively, while retaining FY29E estimates. We also raise our FY27E/FY28E/FY29E EBIT margin estimates by 30bps each to 12.5%/13.0%/13.3% respectively, factoring in strong H1 performance. We continue to value the stock at 18x Sep. 28E earnings to arrive at TP of INR 350 and maintain our BUY rating.
