Firstsource tanks 16% in 2 days after Q1 show; brokerages mixed on outlook
Firstsource Solutions shares fell more than 16% over two sessions after its Q1FY27 results. Net profit declined 2% to ₹165.92 crore, while revenue rose 23.9% YoY to ₹2,751.75 crore. Nomura kept a Buy rating, raised target to ₹310, and revised FY27-FY28 EPS estimates. Emkay raised its target to ₹270 but downgraded to Reduce.
How this was made
The 30-second read
Why it matters
Net profit declined slightly while revenue grew strongly YoY; brokerages differed on outlook, with Nomura keeping Buy and raising target, while Emkay cut to Reduce citing limited near-term upside after recent returns.
Market read
A fresh earnings print with guidance confirmation and a vertical contract termination is being interpreted as insufficient to justify the stock’s recent run, driving a rapid de-rating.
What to watch
The article notes Healthcare contract termination due to client leadership change; traders may be underweighting how quickly new wins offset churn, and overemphasizing short-term EPS estimate revisions versus guidance durability.
Background
Firstsource Solutions reported Q1FY27 (Apr-Jun 2026) results, then the stock sold off sharply over the next two sessions.
Ticker impact
Firstsource Solutions shares fell over 16% in two sessions after its Q1FY27 results, with net profit down 2% and revenue up 23.9% YoY.
Bearish near term, with volatility likely to persist until investors digest the Healthcare contract termination and FY27 constant-currency growth guidance.
The article ties the selloff to the Q1FY27 release and highlights a contract termination in Healthcare, while only partially offsetting it with deal wins and retained FY27 CC growth guidance; brokerages adjust EPS estimates and targets but differ on rating changes.
Market effects
Signals investor sensitivity to BFS/Telecom and Media growth versus client churn in Healthcare for IT services/operations outsourcing peers.
May weigh on India mid-cap IT services sentiment given the large single-name drawdown tied to earnings.
Limited direct global read-through, but Europe and constant-currency growth commentary could influence cross-region IT services positioning.
Counterpoint
The company retained FY27 constant-currency revenue growth guidance (10-13%) and added multiple large deals and new logos, suggesting the selloff may over-discount execution noise from one vertical.
Key entities
- companyFirstsource Solutions Ltd.
Subject of the article; shares dropped after Q1FY27 results, with revenue up YoY and net profit down slightly.
- brokerageNomura
Maintained positive growth view, kept Buy, raised target to ₹310, and revised FY27-FY28 EPS estimates up 2-5%.
- brokerageEmkay
Raised target to ₹270 but downgraded to Reduce, citing limited near-term upside after strong recent returns.
