Firstsource Solutions (FSL) Q2 26/27 earnings summary

Executive summary

• Q2 revenue was ₹28,256m, up 22.2% YoY reported and 12.3% in constant currency; EBIT margin expanded to 12.5%.

• The quarter marked 12 consecutive quarters of sequential growth and eight consecutive quarters of EBIT margin expansion.

• FY27 constant-currency revenue growth guidance rose at the lower end to 10.5%-13%; EBIT margin guidance remained 12.25%-12.75%.

• Strategy is shifting toward AI-enabled, productized services and outcome-linked operations, supported by the Kairos operating system.

Financial highlights

• Q2 revenue was ₹28,256m (US$296m), up 12.3% YoY and 2.0% QoQ in constant currency; audited consolidated operating revenue was ₹28,306.37m.

• Q2 EBIT was ₹3,521m, up 32.1% YoY; EBIT margin was 12.5%, up 100 bps YoY and 10 bps QoQ.

• Q2 PAT was ₹2,328m, up 29.7% YoY; net margin was 8.2% and diluted EPS was ₹3.31.

• H1 revenue was ₹55,505m (US$584m), up 12.3% in constant currency; EBIT was ₹6,888m at a 12.4% margin.

• H1 adjusted PAT was ₹4,551m, up 30.4% YoY; reported PAT was ₹3,987m, including the Q1 exceptional item.

Outlook and guidance

• FY27 guidance: constant-currency revenue growth of 10.5%-13% and EBIT margin of 12.25%-12.75%.

• H2 is expected to be stronger than H1, supported by large-deal ramps, a banking-client transition, new logos and pipeline conversion; reaching 13% depends on program milestones and conversion.

• Broad-based H2 growth is expected from retail seasonal ramps, telecom/media/technology programs and healthcare new logos and scope expansion.

• Medium-term margin aspirations are 14%-15%, with 50-75 bps of annual improvement targeted through automation, delivery optimization and other levers.