Brokerage firm Prabhudas Lilladher has raised its revenue growth guidance for Firstsource Solutions to 10.5-13% for FY27. The company secured four large deals in the second quarter, fueling growth in its banking division. Investors should note the recent performance dip in the healthcare segment and the impact of large-scale hiring on operational costs.
Firstsource Solutions has received a revised outlook from brokerage firm Prabhudas Lilladher, which has adjusted the company's revenue growth expectations for FY27. The brokerage now estimates revenue growth will land between 10.5% and 13%, tightening the lower end of its previous guidance. This update reflects confidence in the company's ability to maintain its recent business momentum.
Strong Deal Momentum and Segment Performance
A primary driver for this optimism is the company's consistent success in winning new contracts. Firstsource Solutions reported that it secured four large deals in the second quarter, marking the seventh consecutive period of high-volume deal activity. This growth is being led by the banking and financial services segment, which posted a 9.9% growth rate. The company is currently managing a significant transition for a major client in this space, which has contributed to the positive revenue outlook.
However, the company’s performance was not uniform across all sectors. The healthcare division, a key part of the business, experienced a 1.6% decline in the second quarter. The company management attributed this to delayed program transitions and the cancellation of certain projects. While management indicated that these specific issues have been resolved, investors will likely track whether the healthcare segment returns to consistent growth in the coming quarters.
Hiring, Costs, and Margin Pressure
The strong flow of new business has led to an aggressive expansion of the workforce. Firstsource added over 3,000 employees during the quarter, the largest increase since the second quarter of 2025. This hiring is primarily concentrated in India and the Philippines to support the start of new contracts and handle the banking client transition.
While this expansion is intended to support revenue growth, it also brings immediate costs. These include wage hikes and the expense of onboarding new staff before they start generating revenue. Despite these costs, the company reported an EBIT margin of 12.5% and managed a slight 10-basis point margin expansion. The brokerage noted that future improvements in operating margins—aiming toward 15%—will depend on the company's ability to use AI tools for productivity and optimize its offshore delivery models.
Investors may monitor the balance between the costs of this rapid hiring and the actual revenue realized from the new contracts. The success of the company in keeping margins stable while integrating a large new workforce will be a key factor for the coming quarters.