Firstsource Q4 Results Review: Dolat Capital Maintains 'Reduce', Sees Limited Upside At Current Valuation

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Dolat Capital Report

Firstsource Solutions Ltd. reported rev. at $250 million (our estimate: $252 million), up 2.1% QoQ in constant currency terms (organic growth muted). Operating profit margin came in at 11.2%, up 11 bps QoQ (our estimate: 11.3%).

For FY26, the management guided CC revenue growth of 12%-15% (implies organic band of 7-10%) and OPM guidance of 11.25%-12%. The company also aims to improve margins by 50-75 bps each year over next three-four years to align its OPM with industry peers.

Given a strong pipeline and management’s confidence in achieving a good conversion rate supported by positive commentary and outlook on major revenue verticals, we have maintained our FY26E/FY27E EPS estimates.

The present valuations capture most positives and upside being limited we maintain our ‘Reduce’ rating with target price of Rs 370 (valuing at 28x FY27E EPS).

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