Firstsource Solutions Q2 FY27 results: net profit up 29.5% to ₹232.44 crore, revenue up 22.2%

How did Firstsource Solutions perform in Q2 FY27?

Firstsource Solutions reported consolidated revenue of ₹2,826 crore for Q2 FY27, up 22.2% from ₹2,312 crore in Q2 FY26 and 3.7% from ₹2,725 crore in Q1 FY27. EBITDA was ₹470.54 crore, up 25.1% year on year, while the margin increased 0.4 percentage points to 16.7%. From the previous quarter, EBITDA rose 4.3% and the margin increased 0.1 percentage points.

Profit before tax was ₹299.35 crore, up 33.4% from ₹224.33 crore a year earlier and 36.5% from ₹219.34 crore in Q1 FY27. Net profit was ₹232.44 crore, compared with ₹179.51 crore in Q2 FY26 and ₹165.92 crore in Q1 FY27, while basic EPS was ₹3.37. On the standalone basis, revenue was ₹917.76 crore and profit after tax was ₹199.41 crore, against ₹98.05 crore a year earlier.

What changed in Firstsource Solutions' costs and profit?

Total expenses increased 20.9% year on year to ₹2,524 crore from ₹2,088 crore, below the 22.2% rise in revenue. Employee cost was ₹1,579 crore, up ₹216.80 crore or 15.9%; other expenses were ₹776.49 crore, up ₹202.07 crore or 35.2%; finance costs rose ₹8.23 crore to ₹50.99 crore; and depreciation increased ₹8.85 crore to ₹118.41 crore.

Other income declined by ₹0.50 crore year on year to ₹1.79 crore. There was no exceptional item in Q2 FY27, compared with a ₹1.91 crore gain in Q2 FY26. Tax expense increased ₹22.09 crore or 49.3% to ₹66.91 crore from ₹44.82 crore. Sequentially, total expenses rose ₹84.49 crore, employee cost increased ₹47 crore, other expenses increased ₹34.49 crore, and tax rose ₹13.49 crore.

How did the first half of FY27 go?

In the first half of FY27, consolidated revenue was ₹5,550.48 crore, up 22.5% from ₹4,529.86 crore in H1 FY26. Total income increased 22.5% to ₹5,554.79 crore, while profit before tax rose 18.5% to ₹518.69 crore. Net profit increased 14.2% to ₹398.36 crore from ₹348.84 crore, and basic EPS rose to ₹5.77 from ₹5.05.

What do the balance sheet and cash flow show?

Total assets were ₹9,748.88 crore on 30 September 2026, against ₹9,320.04 crore on 31 March 2026. Total equity increased to ₹4,877.52 crore from ₹4,384.93 crore, while borrowings were ₹1,941.41 crore compared with ₹1,937.47 crore. Cash and cash equivalents rose to ₹351.83 crore from ₹258.58 crore, trade receivables increased to ₹2,347.11 crore from ₹2,078.59 crore, and trade payables rose to ₹681.59 crore from ₹557.93 crore.

H1 FY27 operating cash flow was ₹496.89 crore, compared with ₹592.68 crore in H1 FY26. Investing cash flow was negative ₹151.55 crore against negative ₹73.08 crore, and financing cash flow was negative ₹253.08 crore against negative ₹451.60 crore. Capital expenditure was ₹104.55 crore, up from ₹71.27 crore a year earlier.

How has Firstsource Solutions done over the last 8 quarters?

Revenue rose in each of the last eight quarters on a year-on-year basis. It increased from ₹2,102.38 crore in Q3 FY25 to a peak of ₹2,825.60 crore in Q2 FY27, with the latest quarter also above ₹2,724.88 crore in Q1 FY27.

Net profit reached its highest level of ₹232.44 crore in Q2 FY27, above ₹205.25 crore in Q4 FY26 and ₹165.92 crore in Q1 FY27. EBITDA margin was 16.7% in the latest quarter, matching its peak in the series shown and up from 16.6% in the previous quarter.

Which businesses drove the quarter?

Banking and Financial Services reported revenue of ₹1,004.70 crore, up 30.8% from ₹767.89 crore in Q2 FY26. Segment EBIT rose to ₹194.76 crore from ₹146.96 crore, with a reported EBIT margin of 19.4%.

Healthcare revenue was ₹895.25 crore, up 15.3% from ₹776.62 crore, while EBIT increased to ₹132.45 crore from ₹103.72 crore. Communication, Media and Technology revenue rose 16.0% to ₹581.86 crore, with EBIT at ₹141.95 crore compared with ₹89.71 crore.

Diverse Industries reported revenue of ₹348.82 crore, up 30.0% from ₹268.40 crore. EBIT was ₹14.71 crore against ₹28.25 crore in the year-ago quarter, and the segment EBIT margin was 4.2%.

What else did the company announce?

The board approved the audited standalone and consolidated financial results for the quarter and half year ended 30 September 2026 on 29 October 2026. The company also filed investor presentations and an intimation of the analyst and institutional investor call.

The Nomination and Remuneration Committee approved a grant of 587,750 stock options on 29 October 2026. Each option is exercisable into one equity share and was granted to eligible employees of the company and its subsidiaries under the Firstsource Solutions Limited Employee Stock Option Plan 2019. No dividend or fund-raising announcement was included in the cited same-day filings.

What did Firstsource Solutions' management say?

Management raised the lower end of FY27 constant-currency revenue growth guidance to 10.5%-13% from 10%-13% and reaffirmed EBIT margin guidance of 12.25%-12.75%. It expects H2 revenue growth to be stronger than H1 and sees the pipeline providing a path to the upper end of the revenue range.

Management said H2 should benefit from deal ramps, a banking-client transition and pipeline conversion. The number of clients generating more than $5 million rose to 51 after adding six clients in Q2, and the company intends to increase a non-linear revenue mix that already accounts for more than 50% of revenue through Kairos-led productisation.

The company identified healthcare payer scope recalibration, the BPaaS wind-down, wage increments and onboarding costs, pipeline conversion and two exceptional client charges as risks. Associate attrition remained elevated at 28.4%, requiring retention intervention, while the upper end of FY27 growth depends on transformation milestones and conversion over the next 2-3 months.

How did Firstsource Solutions shares react?

After the filing appeared, the stock was down 1.7% after five minutes, 2.3% after 15 minutes and 3.0% after 30 minutes. On the reaction day, it fell 6.0% from the previous close, compared with a 1.9% decline for the industry median and a 2.0% fall for the Nifty Smallcap 250; the stock underperformed the industry median by 4.2 percentage points.

By the next day's close, the stock was down 4.2% from its pre-results close. The industry median was also down 4.2%, while the Nifty Smallcap 250 was down 0.6%, leaving Firstsource Solutions with no excess return against the industry median. Earlier reaction-day moves included 11.6% on 6 May 2026, 13.4% on 28 October 2024 and 1.8% on 30 July 2024.