Firstsour.Solu. Q1 FY27 Results (NSE: FSL)
Signal: Growth reaccelerated
The read
Core revenue growth remained strong at 23.9% YoY, with EBIT margin expanding 90bps to 12.5%, marking the fifth consecutive quarter of margin expansion. PAT declined 2.0% YoY due to an exceptional charge of ₹563M net of tax from a client contract termination and indemnification, but adjusted PAT grew ~31% YoY. The company reiterated FY27 constant currency revenue growth guidance of 10-13% and EBIT margin guidance of 12.25-12.75%.
| Metric | Value | YoY | QoQ |
|---|---|---|---|
| Revenue | ₹2,751.75 Cr | 23.9% | 5.3% |
| EBIT | ₹342.78 Cr | 33.6% | |
| Net profit | ₹165.92 Cr | -2.0% | |
| EPS | ₹2.4 | -2.0% | |
| EBIT margin | 12.5% |
P&L walk
Revenue grew 23.9% YoY to ₹27,517m; employee cost grew slower at 16.0%, driving 90bps EBIT margin expansion. PAT declined 2% due to exceptional charge of ₹716.86m (₹563m net of tax) from client contract termination and indemnification.
Segments
Communications, Media and Technology segment PBIT surged 77.9% YoY to ₹1,426m, and Banking and Financial Services grew 35.4% to ₹2,030m, driving overall segment PBIT growth of 37.4% before exceptional and unallocated items.
Key positives
- Revenue grew 23.9% YoY — ninth consecutive quarter of double-digit growth.
- EBIT margin expanded 90bps YoY to 12.5% — fifth straight quarter of margin expansion.
- Employee cost efficiency improved 380bps YoY as a % of revenue (55.7% vs 59.5%).
- Strong deal wins: 4 large deals signed, 12 new logos added including 3 strategic accounts.
Key concerns
- PAT declined 2.0% YoY due to exceptional charge of ₹563M net of tax from client contract termination and indemnification.
- High voluntary attrition at 27.5% may indicate employee retention challenges.
- Standalone PAT grew 52.9% but consolidated was dragged by subsidiary issues, indicating earnings quality divergence.
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