Firstsource Solutions Ltd: Is It a Deep Value Opportunity?

Firstsource Solutions Ltd has a deep value score of 61/100 (rated Strong). This score is calculated from three components

• Earnings Score: 24/40 — measures PAT growth momentum across quarters
• Underperformance Score: 20/35 — how much the stock trails Nifty 500 (deeper underperformance = higher contrarian signal)
• Quality Score: 6/25 — operational quality (margins, revenue growth, valuation)

Firstsource Solutions Ltd's quarterly profit (PAT) growth trajectory

• Latest Quarter PAT Growth (QoQ): +71%
• Previous Quarter PAT Growth (QoQ): -33%
• 2 Quarters Ago PAT Growth (QoQ): +6%
• PAT Acceleration: +32.3pp (profits are accelerating)
• 1 consecutive quarters of positive PAT growth

Firstsource Solutions Ltd is underperforming the market despite improving earnings — this is the core deep value thesis

• 1-Year Return vs Nifty 500: -35%
• 6-Month Return vs Nifty 500: -29%
• 3-Month Return vs Nifty 500: -3%
• Yet average quarterly PAT growth is +15% — earnings are improving
• The market often takes time to re-rate stocks with improving fundamentals. This gap between price performance and earnings improvement is what deep value research seeks to identify.

Firstsource Solutions Ltd's earnings momentum is Steady — consistent growth.

• PAT QoQ progression: +6% → -33% → +71% (2Q ago → 1Q ago → latest)
• Acceleration: +32.3pp
• PAT YoY Growth: +27%

Firstsource Solutions Ltd's valuation metrics

• Price-to-Earnings (PE): 24.3x
• Price-to-Book (PB): 3.8x
• PEG Ratio: 1.8x

Firstsource Solutions Ltd's revenue and margin trends

• Latest Quarter Revenue Growth (QoQ): +6%
• Average Quarterly Revenue Growth: +5%
• Revenue Acceleration: +0.7pp
• Latest OPM Change: +0.2pp (margins expanding)
• Average OPM Change: +0.3pp
• Revenue YoY: +20%

Firstsource Solutions Ltd's trailing twelve month (TTM) performance

• TTM PAT: ₹674 Cr
• TTM PAT Growth: +13.5% YoY
• TTM Revenue: ₹10,000 Cr
• TTM Revenue Growth: +19.8% YoY
• TTM Operating Margin: 16.3%

Firstsource Solutions Ltd key facts

• Sector: IT Enabled Services
• Market Cap: ₹16.8K Cr
• Rank in IT Enabled Services: #2 by value score
• Overall rank among all deep value stocks: #62

Firstsource Solutions Ltd shows strong deep value signals — good score (61/100), accelerating earnings, and significant underperformance vs Nifty.

• Value Score: 61/100 (Strong)
• Earnings: Accelerating
• 1Y Underperformance: -35% vs Nifty 500

Other deep value stocks in IT Enabled Services

• Route Mobile Ltd — Score 54/100, Average, earnings accelerating

IT Enabled Services deep value sector overview

• 2 deep value stocks in this sector
• Average value score: 58/100
• Avg PAT acceleration: +52.0pp
• Top pick: Route Mobile Ltd

Deep value investing studies stocks that are underperforming the market despite showing improving fundamentals. The thesis is that the market has not yet recognized the earnings recovery, creating a potential valuation gap. It requires patience — recovery can take several quarters.

The deep value score (0-100) combines three factors:

- Earnings (0-40 pts): PAT growth across last 3 quarters, acceleration, and consecutive growth - Underperformance (0-35 pts): How much the stock trails Nifty 500 over 1Y, 6M, 3M (deeper underperformance = higher score) - Quality (0-25 pts): Revenue growth, margin trends, and valuation metrics (PEG, P/B)

Higher score indicates a stronger contrarian research signal.