Firstsource Solutions

“If you recall, even in our commentary at the end of the first quarter as well, we had stated right then as well that we expect H2 to be stronger than H1,”

“The senior folks get their wage hikes in Q3. But everything that we are forecasting from an EBIT standpoint reflects and adjusts for or accounts for the fact that there will be the wage increments and we should still be within the guidance that we have provided.”

“Clearly, we set the guidance with the clear line of sight at the lower end and the pipeline provides the path to the upper end of the guidance.”

“In Q2, we signed four large deals, our seventh straight quarter of four or more, and two of those came from new logos.”

“During the quarter, we added 17 new logos, one of our highest quarterly additions. It includes six strategic logos.”

“One of the large deals that we won this quarter, which is also a new logo, was on the back of this partner,”

“We won a large deal from a leading digital bank in the US for CX services.”

“We expanded our relationship with a leading UK-based MVNO for customer experience services across multiple markets, including the transition of their in-house operations to our offshore delivery centers.”

“In Q2 FY27, our BFS vertical grew 19% year-on-year and 9% sequentially in constant currency terms.”

“In healthcare, our revenues grew 5% year-on-year, but declined 2% sequentially in constant currency terms.”

“our view is that, look, some of this is pretty much behind us and that in turn should create the opportunity for the healthcare business to grow going forward.”

“Coming to the CMT vertical, revenues grew 6% year-on-year and were flat sequentially in constant currency terms with two new logos added during the quarter.”

“And finally, our diverse portfolio, comprising of our utilities and our retail business grew 25% year-on-year and was flat sequentially in constant currency terms with two new logos added during the quarter.”

“Consumer debt levels and servicing complexity kept demand high. Cost pressure kept clients focused on efficiency.”

“From January of 2027, under HR1, Medicaid renewals for expansion adults move from annual to six-monthly, phasing in through the year.”

“the pipeline is at its best ever, so we have a healthy pipeline as well.”

“Pretty much all of that has to run on a continuous basis, and therefore we don't end up anticipating seeing the kind of furloughs that you typically end up seeing on the IT services side.”

“EBIT margin for the quarter was 12.5%, up 100 basis points year-on-year and 10 basis points on a quarter-on-quarter basis, respectively.”

“One of the things to also bear in mind is this quarter, we've expanded margins despite absorbing the first phase of annual wage increments as well and the cost of onboarding 3,000 people largely ahead of revenue coming in as well.”

“You alluded to right-shoring, so clearly about 80% of the gross hiring that we are doing today is offshore or nearshore. India and the Philippines accounted for about 85% of the Q2 hirings.”

“I think right-shoring will play a role, automation will play a role, process excellence will play a role, operating parameters, account-level margin improvements, reducing dependence on low margin and loss-making accounts where they exist, talent cost rationalization, pricing and change requests and facility optimization.”

“But a lot of those margin opportunities are not what you're seeing translate straight into the bottom line itself because some of it gets reinvested in capabilities.”

“Turning to the balance sheet, our cash and bank balance stood at INR4.1 billion and net debt was INR15.3 billion versus INR17.1 billion at the end of June 2026.”

“Normalized DSO continued to be in the range of 67 to 69 days.”

“Our FCF to PAT for the quarter was 150% and for the half year it was 126%.”

“we have coverage of GBP69.2 million for the next 12 months with an average rate of INR 116.6 per pound and coverage of USD68.5 million with an average rate of INR95.7 per dollar.”

“There are 2 things that we're really looking at, number one, it has to be something which plugs a capability gap. For instance, it could be in healthcare, it could be something that could be in -- we did something on the retail side 2 years back when we acquired Ascensos as an example or it could be something on the distribution access side.”

“We acquired TeleMedik earlier part of this year, and that gave us a Puerto Rico footprint,”

“Our relationships with both clients remain strong. We are actively engaged with them on recovery and we remain optimistic about the outcome.”

“But getting there depends on how quickly some of the phased transformation programs reach the milestones as well as some of the pipeline conversion that we have over the next 2-3 months itself.”

“there was a timing challenge with some of the payer program as Medicare Advantage clients recalibrated scope after some of the CMS rate adjustments.”

“But the simple answer to your question is, yes, you are starting to see the emergence of all kinds of players in the marketplace, not just AI-native start-ups.”

“So, in a couple of our existing customers where we've had renewals, I think we've been able to come out of that exercise despite having some deflation in the existing scope of work, still be able to maintain the revenue base at neutral because we've taken on other pieces of work with them.”

“Our revenue grew by 22.2% year-on-year and 3.7% quarter-on-quarter and came in at INR 28.3 billion.”

“In constant currency terms, our revenue grew 12.3% year-on-year and 2% quarter-on-quarter.”

“Profit after tax was INR2.3 billion or 8.2% of the revenue, up 29.7% year-on-year and 4.8% sequentially on normalized basis.”

“Our net profit was INR2.3 billion and the diluted EPS for the quarter was INR3.31.”

“H1 EBIT was INR6.9 billion, up 33.4% year-on-year with a margin of 12.4% and adjusted profit after tax was INR4.5 billion, up 30.4% year-on-year.”