Firstsource Profit Rises 29.7% to 2,328 Million Rupees in Second Quarter
Key Facts
Firstsource Solutions reported on October 29, 2026, that profit after tax rose 29.7% year over year to 2,328 million Indian rupees in the second quarter of fiscal 2027, which ended on September 30. Revenue reached 28,256 million rupees, up 22.2% from the year-earlier period, while diluted earnings per share came to 3.31 rupees. Consolidated results, prepared under Indian IndAS standards, showed operating profit growing faster than revenue. Profit before interest and tax was 3,521 million rupees, equal to 12.5% of revenue, up 32.1% year over year. Profit after tax was also 8.2% of revenue in the quarter.
Revenue growth extended into the first half of the fiscal year, reaching 55,505 million rupees, up 22.5% year over year. Profit before interest and tax was 6,888 million rupees, with a margin of 12.4% and year-over-year growth of 33.4%. But profit after tax needs to be read by distinguishing the reported figure from the adjusted one. The company posted reported profit of 3,987 million rupees in the first half, compared with 4,551 million after adjustment. The difference reflects exceptional post-tax charges of 563 million rupees recorded in the first quarter of fiscal 2027. These charges put first-half results in their accounting context, while the revenue and operating profit figures remain separate from them in the disclosure.
The company raised the lower end of its revenue growth outlook for fiscal 2027, setting the expected range at 10.5% to 13% on a constant-currency basis. The disclosure did not specify the previous lower-end figure, so the announced change is limited to raising it without a number for comparison. Firstsource expects its fiscal-year profit-before-interest-and-tax margin to range from 12.25% to 12.75%. This guidance follows a margin of 12.5% in the second quarter and 12.4% in the first half. Management said the second half is expected to be stronger than the first, with contributions from the ramp-up of large deals, the transition of a banking client and seasonal demand in retail. This outlook remains part of management's guidance for the coming period, alongside the announced revenue growth and margin ranges.
The company linked business growth to an expanding client base and new deals across several sectors. Among the announced contracts, one of North America's top 10 healthcare payers selected it to process claims. It also won a U.K. and European banking client for managed operations support services, and a U.S. student loan provider for legal collections and debt recovery services. During the quarter, the banking and financial services segment added 9 logos, healthcare added 4, telecommunications, media and technology added 2, and diversified industries added 2. These additions show that new contracts were spread across the company's different business lines, while the announced deals included claims processing, banking operations and collections services. The company said the bank and student loan provider contracts represent two new clients.
On human resources, the company ended the quarter with 39,937 employees, following a net increase of 3,062 employees during the period. Voluntary attrition was 28.4%. Chairman Sanjiv Goenka said the first-half results reflect the company's strategy and execution discipline. He added that the company is moving toward technology-led solutions, backed by sector expertise and accountability for outcomes, as artificial intelligence reshapes the industry. The chief executive expressed a similar focus on building a model that can be replicated across different clients, markets and teams, saying: "When we solve a problem well once, we should be able to solve it well again for a different client in a different market with a different team." These statements link the company's stated strategy to developing solutions and expanding their application.
The earnings call data showed free cash flow at 150% of profit after tax in the quarter and 126% in the first half. Net debt fell to 15.3 billion rupees from 17.1 billion at the end of June 2026. After the results were announced, the stock settled at $15.79, near the bottom of its 52-week range of $15.70 to $16.67. The data showed quarterly revenue of $296 million, up 11.7% year over year in dollar terms. On a constant-currency basis, revenue grew 12.3% year over year and 2% from the previous quarter. These indicators combine improved annual guidance with management's expectation of a stronger second half, while the stock settled near the bottom of its yearly range after the results were released.