Upgrades

FY26 organic revenue growth guidance at top end reduced by 100bps on account rationalization. Strong 4QFY26 exit likely

3Q stronger than expected. FY26/FY27/FY28 likely to see mid-high teen revenue growth in USD terms with improving margins. An outlier

About the stock: Firstsource Solutions (FSL) provides business process services to BFSI, communication, media, tech and healthcare. FSL is a domain driven BPM services company which has 200+ global clients, including several Fortune-500...

Better than estimated revenue growth and margin in 2Q. 2HFY26 should also be solid. Mid-High teen USD revenue growth likely in FY27/FY28

Retains its industry leading revenue growth outlook for FY26. Ups the lower end of the band. Strong order inflow and new logo addition helps

1QFY26 CC QoQ growth was robust at 3.3% (broadly in line with our estimate). EBIT margin was much better than estimate (by ~200bps)

FSOL has signed an agreement for acquiring Pastdue Credit Solutions (PDC) – a UK-headquartered debt collection agency serving UK’s several market-leading companies, including banks, utility firms, telecom players, and government bodies – for a cash consideration of £22mn (1.3x P/S on FY24 basis).

Firstsource (FSOL) delivered yet another quarter of strong topline growth in Q3FY25; revenue grew 7.6% QoQ CC, compared to our growth estimate of 6.9%.

eClerx posted weak operating performance in Q1. Revenue fell 2% QoQ, hit by budget cuts, drop in project renewals and unanticipated project cancellations particularly among large clients in the digital and financial markets. OPM declined by 530bps QoQ. Management expects revenue to rebound in Q2 and log closer to Q4FY23 levels, further improving in H2.

eClerx Services Q3 results were better-than expected on US$ revenue growth but profitability was lower-than-expected. Q3FY23 revenue stood at US$ 85.1mn (grew 3.2% QoQ as well as cc terms). Top-10 client growth declined 0.6% QoQ in dollar terms, led by lower onshore revenues. The management indicated that top-10 client softness was limited to onsite engagement and that offshore momentum is intact.