Firstsource Solutions shares fall after Q3 net profit declines 25% YoY

Firstsource Solutions share price today

Firstsource Solutions share price fell over 2 per cent in Wednesday's session following the release of the company's third-quarter results (Q3FY26). The scrip fell as much as 2.1 per cent to ₹303.35 on the National Stock Exchange (NSE).

 

The counter has seen a trade of 0.5 million shares on NSE so far. As of 11:19 AM, Firstsource Solutions was trading 2.02 per cent down at ₹303.60, as against a 0.06 per cent decline in the Nifty 50 index.

 

In the last 12 months, Firstsource Solutions declined 9.06 per cent, as compared to an 8.19 per cent advance in the Nifty 50 index.

 

Why did Firstsource Solutions share price fall today?

 

Firstsource Solutions share price tumbled in Wednesday's session as the company’'s net profit declined 25 per cent on year to ₹120.3 crore in the December quarter (Q3FY26) from ₹160.3 crore in the corresponding period of the previous financial year (Q3FY25).

 

Meanwhile, the revenue from the operation increased 16.2 per cent to ₹2,443.1 crore from ₹2,104.2 crore. The earnings before interest, taxes, depreciation, and amortisation (Ebitda) rose 26.8 per cent on year to ₹403 crore from ₹318 crore. 

 

Firstsource Solutions set the revenue guidance at 14.5–15.5 per cent for the financial year 2026 (FY26). The guidance also includes 1.5 per cent contribution from acquisitions of Pastdue Credit Solutions and TeleMedik, the company said in the Investors’ Presentation.

 

Firstsource Solutions recorded five large deal wins in the third quarter of the current financial year (Q3FY26). The exit deal pipeline was at over $1 billion. The revenue guidance for the current financial year is at the top decile of the peer group, the company said.

 

Nomura

 

Firstsource Solutions delivered third-quarter numbers in line with Nomura’s estimates. The company has started rationalisation in the healthcare verticle which could weigh 50 basis points on the revenue growth for the ongoing financial year, the brokerage said.

 

Nomura expects that Firstsource Solutions may deliver 14.9-17 per cent Y-o-Y revenue growth in US dollar terms from financial year 2026 (FY26) to financial year 2028 (FY28). 

 

The brokerage believes Firstsource Solutions can expand earnings before interest and taxes (Ebit) margins to 14–15 per cent over the medium term as it has identified nine tracks apart from 37 sub-tracks internally to improve the Ebit margins by 50–75 basis points annually. Nomura estimates Ebit margin to be at 11.7-13.1 per cent in the financial year 2026 and 2028. 

 

Nomura tweaked earnings-per-share (EPS) by less than 1 per cent to factor in the third-quarter (Q3FY26) results. Now, the brokerage estimates that Firstsource Solutions could deliver a 30 per cent EPS growth from financial year 2026 to financial year 2028.

 

One key downside risk is the potential impact of automation on the contact center business, Nomura said.

 

The brokerage maintained a ‘Buy’ rating on the stock, while reducing the target price to ₹415 from ₹420 per share. The current target price implied an upside potential of 37 per cent from the current level.     

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