1. At a Glance
Firstsource Solutions is what happens when a “boring” BPM company refuses to stay boring. Sitting at a market cap of ₹21,897 crore with a stock price around ₹310, the company just delivered Q3 FY26 consolidated revenue of ₹24,431 mn and PAT growth of ~27% YoY. Operating margins are holding steady at ~16%, ROCE is a respectable ~15%, and dividends are not just decorative — payout has hovered near 47% lately.
Three-month returns are ugly (double-digit red), one-year returns are meh, but zoom out and the five-year CAGR is a very healthy ~26%. This is the classic “market got bored, fundamentals didn’t” setup. The Healthcare vertical is quietly becoming the main character, BFSI is slimming down like a post-Diwali diet plan, and acquisitions are being sprinkled with intent, not panic.
If you thought BPM was just call centers with headsets and scripts, Firstsource is here to remind you that data, compliance, AI, and healthcare billing can mint real money. Curious yet?
2. Introduction
Firstsource Solutions belongs to the RP-Sanjiv Goenka Group — a conglomerate that touches everything from power to retail to media. In theory, that sounds like corporate masala. In practice, it gives Firstsource something many mid-cap IT-BPM firms lack: capital discipline and long-term patience.
The company’s tagline — Digital First, Digital Now — sounds like marketing fluff until you look at where revenue is coming from. Healthcare is now 36% of H1 FY25 revenue, up from 29% in FY22. BFSI, once the heavyweight, is down from 49% to 35%. This is not accidental. US healthcare outsourcing is complex, compliance-heavy, and sticky. Once you get in, clients don’t like to switch — unlike banks who flirt with vendors every budget cycle.
Geographically, North America still
contributes ~68%, which means currency and US macro cycles matter. Delivery is slowly shifting offshore and near-shore, helping margins without screaming “cost cutting.” Headcount is nearing 33,000, attrition is high (~31%), but welcome to BPM — that’s the industry tax.
So the big question: is Firstsource just riding a good healthcare wave, or is this a structurally better BPM company?
3. Business Model — WTF Do They Even Do?
Explaining Firstsource to a lazy but smart investor goes like this:
- Hospitals hate paperwork.
- Insurance companies hate fraud.
- Banks hate customer complaints.
- Tech companies hate scaling support.
Firstsource monetizes all of that hatred.
Healthcare (36%)
This is the crown jewel. Firstsource works with 1,000+ US hospitals and 7 of the top 10 US health insurers. Services include revenue cycle management (RCM), payer operations, provider services, and compliance-heavy workflows. These are mission-critical. Screw them up and cash flow stops. That’s why margins here are decent and churn is low.
Banking & Financial Services (35%)
CX services, credit cards, mortgages, SME banking, fintech ops — less sexy, more price-sensitive. The company is consciously de-risking this segment.
Communications, Media & Tech (22%)
Streaming platforms, telecom, broadband, ed-tech, e-commerce. Volatile
