Firstsource Solutions Q1FY27 Revenue Up 22.9% YoY to ₹27.2 Billion; Reaffirms FY27 Guidance
Firstsource Solutions reported Q1 FY27 revenue of ₹27.2 billion, up 22.9% YoY. EBIT margin improved to 12.4%. The company secured four large deals and reaffirmed FY27 constant currency revenue growth guidance of 10-13% and EBIT margin of 12.25-12.75%. An exceptional charge of ₹717 million was recognized, including ₹357 million for a terminated healthcare BPaaS engagement.
The strong revenue growth, margin improvement, and reaffirmation of guidance are significant positive indicators for the company's financial health and future prospects.
The company reported strong year-on-year revenue growth and improved EBIT margins. Despite a one-off charge and the winding down of a specific engagement, the reaffirmation of full-year guidance indicates confidence in future performance.
Firstsource Solutions Limited reported a strong Q1 FY27 performance, marking the ninth consecutive quarter of double-digit year-on-year revenue growth. Revenue surged by 22.9% year-on-year to ₹27.2 billion (US$288 million), and grew 5.5% quarter-on-quarter. EBIT margin improved by 110 basis points year-on-year to 12.4%, with adjusted net profit at ₹2.2 billion.
The company secured four large deals in the quarter, maintaining a streak of at least four large deals for six consecutive quarters. Notable wins include a transformative deal for back-office transformation with a UK-based benefits and pension administration provider, and a new logo win with a US academic medical centre for claims resolution.
Performance across verticals showed mixed trends. Banking and Financial Services (BFS) grew 14% year-on-year, driven by demand in intelligent operations and collections. Healthcare revenues grew 11% year-on-year, though declined 2% sequentially due to pacing effects with Medicare Advantage clients and the winding down of a transformative BPaaS engagement. The company has taken a prudent charge of ₹357 million related to this program termination, but maintains that the client relationship continues to grow and that the overall healthcare deal pipeline remains healthy.
The CMT vertical grew 6% year-on-year, with AI-led improvements in customer service being a focus. The diverse portfolio grew 27% year-on-year. Geographically, Europe showed strong growth of 18% year-on-year, while North America delivered 8% year-on-year growth.
Firstsource reaffirmed its full-year FY27 guidance for constant currency revenue growth of 10% to 13% and an EBIT margin band of 12.25% to 12.75%. This guidance is maintained despite the expected 1% to 1.5% impact from the winding down of the healthcare BPaaS engagement, highlighting the underlying strength of the rest of the portfolio and a robust pipeline.
In addition, the company recognized exceptional charges totaling ₹717 million, including ₹284 million related to indemnification of a regulatory penalty and ₹76 million for fair value adjustment on contingent consideration for the Ascensos acquisition.
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