Firstsource Solutions Limited – Investor Presentation Summary

Key Operational Highlights

  • Total employees increased to 39,937 as of Q2FY27 with net addition of 3,062 employees in the quarter
  • 12th straight quarter of QoQ revenue growth achieved
  • Four large deal wins in Q2FY27 (seventh straight quarter of 4+ deals)
  • US$5m+ clients increased to 51 from 45 in Q1FY27
  • US$10m+ clients increased to 23 from 20 in Q1FY27
  • Attrition rate (TTM) stood at 34.0% for employees with >180 days service

Key drivers of operational performance: Expanded sales team, senior leadership hires, new roles for strategic initiatives, capability expansion, AI infusion across services, vertical-specific language models, and brand amplification.

Segment-wise Performance

  • Banking & Financial Services: 35.5% of revenue (up from 33.2% in Q1FY27)
  • Healthcare: 31.6% of revenue (down from 33.0% in Q1FY27)
  • Communication, Media & Tech: 20.6% of revenue (consistent with Q1FY27)
  • Diverse Industries: 12.3% of revenue (down from 13.2% in Q1FY27)

Explanation of significant changes in segment performance: Banking & Financial Services segment showed strongest growth increasing share by 230 basis points quarter-over-quarter, while Healthcare segment declined by 140 basis points.

Financial Highlights

Revenue: Rs. 28,306 million (Q2FY27)

EBITDA: Rs. 4,705 million

PAT: Rs. 2,328 million

EPS: Rs. 3.31 per share

Margins: EBITDA margin 16.7%, EBIT margin 12.5%, Net margin 8.2%

YoY/QoQ comparison: Revenue grew 22.3% YoY and 2.9% QoQ; EBIT grew 32.1% YoY and 4.6% QoQ; PAT grew 29.7% YoY and 40.3% QoQ

Drivers of financial performance: Revenue growth, operational efficiencies, and margin expansion

Geographical Revenue Split

Domestic vs Export/Regional Revenue:

  • North America: 65.6% of revenue (down from 66.4% in Q1FY27)
  • Europe, Middle East, and Africa: 32.7% of revenue (up from 31.7% in Q1FY27)
  • Rest of World: 1.7% of revenue (down from 1.9% in Q1FY27)

Delivery Location Split:

  • Offshore & Nearshore: 42.3% of revenue (down from 43.5% in Q1FY27)
  • Onshore: 57.7% of revenue (up from 56.5% in Q1FY27)

Balance Sheet Snapshot

Net Debt/Equity: Not Specified

Reserves: Not Specified

Current Assets/Liabilities: Current assets ₹32,663 million; Current liabilities ₹36,594 million

Working Capital/Leverage Metrics: Working capital changes showed outflow of ₹3,390 million in H1FY27

Financial Health Insights: Cash and cash equivalents increased to ₹3,518 million from ₹2,586 million at March 2026; Total assets increased to ₹97,489 million from ₹93,200 million

Capex & Cash Flow Health

Capital Expenditure: ₹991 million in H1FY27 (net)

Free Cash Flow: Not Specified

Operating Cash Flow: ₹4,969 million generated in H1FY27

Net Debt Movement: Net change in borrowings was ₹200 million decrease in H1FY27

Investment Rationale: Focus on technology upgrades and AI capabilities development

Strategic & R&D Initiatives

Investments in Innovation: Kairos AI operating system for AI-native operations; AI-powered solutions for customer experience, collections, and healthcare services; Vertical-specific language models; Agentic workflows/co-pilots

Expected impact on growth: 35%+ improvement in customer feedback for top UK retail bank; 85%+ resolution by autonomous agents for leading US financial services firm; 60%+ reduction in mean-time-to-repair for top US telecom & media company; 20%+ reduction in cost-to-serve for large UK media player

Strategic Rationale: Transforming from traditional BPO to "Intelligence That Operates" model; Addressing ~7x larger addressable market through services-as-software approach

Industry Trends & Business Environment

Macro/Industry Trends: Enterprises challenged with capturing value of AI; AI capability scales exponentially while human comprehension follows linear curve

Impact on Company: Positioning as full-stack intelligence operator with strategy, build, and run capabilities; Outcome-linked engagements with skin in the game

Management Commentary & Growth Outlook

Strategic Outlook: "We see potential to grow at an accelerated pace over the medium term" with macro and technology shifts opening new market opportunities

FY Guidance: FY27 revenue growth guidance at top decile of peer group

Risks and Opportunities: Risks include fluctuations in earnings, ability to manage growth, intense competition in BPS market, wage increases, ability to attract and retain professionals, time and cost overruns on contracts, client concentration, international operations management, reduced demand in key verticals, telecom disruptions, acquisition integration, liability for damages, subsidiary performance, withdrawal of government incentives, political instability, legal restrictions, unauthorized IP use, and general economic conditions

ESG Updates: Not Specified

Digital Transformation: Comprehensive AI transformation across all service offerings with Kairos operating system; AI embedded into existing platforms for smarter workflows; Leverage models for hyper-personalization and scalable outcomes