Broker’s call: Firstsource Solutions (Buy)

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Target: ₹190

CMP: ₹165.75

We hosted Firstsource Solution’s CEO Ritesh Idnani and its senior management team, for NDR in Mumbai.

Key takeaways: Idnani gave details about his growth strategy encompassing the ‘One Firstsource’ framework that focuses on 7 strategic initiatives, including simplification of organisational structure — North America divided into 3 industry units of BFS, Healthcare, and CMT & others; Europe to remain a geographical business unit. The framework also aligns FSOL’s services portfolio into 5 capability areas — collections, customer experience, consulting, trust & safety, and data & analytics.

The management believes steadfast execution per the framework will drive top-quartile revenue growth, with margin improvement. CEO plans sharing specific growth aspirations by end-FY24.

The management remains confident about achieving 0-2 per cent growth in FY24 and operating at 11-11.5 per cent EBITM. Overall, BPO market size is $300 billion, of which Customer Experience (CX) comprises 25-30 per cent. FSOL derives about 53 per cent of revenue from CX. Only around 27 per cent of the CX market is outsourced, thus offering a huge opportunity.

We maintain Buy, with TP of ₹190, at 18x its Sep-25 EPS