Firstsource Solutions Ltd.
ISIN: INE684F01012 • Market Cap: ₹19,376 Cr
The 5-Pillar Quality Audit for Firstsource Solutions Ltd.
Evaluated across Profitability, Financial Health, Historical Compounding, Valuation Safety, and Ownership Governance:
1. Profitability & Capital Efficiency
Weight: 25%Measures operating margins (16.5%), Return on Capital Employed (20.6%), and equity compounding (15.4%).
2. Financial Health & Solvency
Weight: 25%Debt-to-Equity is 0.46 with comfortable interest coverage and clean working capital.
3. Growth & Compounding Track Record
Weight: 20%Historical 3Y Sales CAGR (16.7%) and 3Y PAT CAGR (9.2%).
4. Valuation Multiple & Margin of Safety
Weight: 15%Trades at P/E of 28.88 vs PEG of 1.44 and Dividend Yield of 2.0%.
5. Ownership Quality & Governance
Weight: 15%Promoter holding stands at 53.7%, backed by 33.8% institutional ownership.
Key Fundamental Strengths
Superior Capital Efficiency (ROCE: 20.6%)
Firstsource Solutions Ltd. generates exceptional return on capital employed of 20.6%, reflecting pricing power and competitive moat.
Strong Topline Expansion (3Y Sales CAGR: 16.7%)
Revenue has expanded at 16.7% CAGR over 3 years, signaling industry market-share gains.
Deep Institutional Sponsorship (33.8%)
Mutual funds, domestic DIIs, and foreign FIIs hold 33.8%, providing strong governance scrutiny.
Areas to Watch & Potential Risks
Sectoral & Macro Headwinds (Services)
Subject to broader cyclical demand, raw material price shifts, and regulatory frameworks governing the Services space.
Quantitative Strategy Eligibility
Checking FSL against established Indian wealth creation frameworks:
Coffee Can Investing Framework
Passes Saurabh Mukherjea's Coffee Can rule: 10%+ sustained revenue growth and 15%+ ROCE/ROE.
Quality Factor Screener (High RoIC + Low Debt)
Qualifies for Indian Quality Indices with overall score of 77/100 and clean gearing.
GARP / Value-Growth Blend
Valuation multiple or return metrics require further cyclical pullback.
Services Sector Peer Comparison
Compare FSL directly against top industry peers by market capitalization:
| Company | 5-Pillar Score | Market Cap | P/E | ROCE | D/E | Scorecard |
|---|---|---|---|---|---|---|
| Firstsource Solutions Ltd. (FSL)Current | 77/100 | ₹19,376 Cr | 28.88 | 20.6% | 0.46 | — |
| Adani Ports and Special Economic Zone Ltd. (ADANIPORTS) | 71/100 | ₹3.87 Lakh Cr | 29.51 | 11.6% | 0.57 | View |
| InterGlobe Aviation Ltd. (INDIGO) | 53/100 | ₹2.00 Lakh Cr | — | 5.7% | 0.26 | View |
| GMR Airports Ltd. (GMRAIRPORT) | 73/100 | ₹1.08 Lakh Cr | 225.70 | 5.8% | -15.03 | View |
| JSW Infrastructure Ltd. (JSWINFRA) | 68/100 | ₹76,925 Cr | 51.79 | 13.1% | 0.59 | View |
| Container Corporation of India Ltd. (CONCOR) | 66/100 | ₹39,147 Cr | 31.52 | 13.5% | 0.00 | View |
Frequently Asked Questions: Firstsource Solutions Ltd.
Q:What is the 5-Pillar Fundamental Score for Firstsource Solutions Ltd. (FSL)?
Firstsource Solutions Ltd. has a RupeeTools Fundamental Score of 77/100, placing it in the 'Solid & Healthy' category. Its pillar scores are: Profitability (77/100), Financial Health (80/100), Growth (70/100), Valuation (77/100), and Ownership Quality (85/100).
Q:Is FSL fundamentally strong for long-term investment?
Yes, FSL exhibits solid fundamental strength with a 77/100 score, driven by a return on equity of 15.4% and a debt-to-equity ratio of 0.46.
Q:Does FSL pass the Coffee Can Investing filter?
Yes! FSL satisfies both core pillars of Coffee Can Investing: achieving consistently high capital returns (ROCE/ROE >= 15%) alongside double-digit multi-year revenue growth.
Q:How does FSL compare against other Services peers?
Within India's Services sector, FSL trades at a P/E of 28.88 and generates an ROCE of 20.6%. Compare its 5-Pillar score of 77/100 against top sector peers like Adani Ports and Special Economic Zone Ltd. (71/100), InterGlobe Aviation Ltd. (53/100).
Regulatory & SEBI Research Analyst Compliance Disclaimer:
This 5-pillar fundamental score is an automated quantitative health check generated purely from historical public financial statements, corporate filings, and exchange disclosures for educational and informational purposes only. It does NOT constitute investment advice, a stock recommendation, or a solicitation to buy or sell securities. RupeeTools is not a SEBI-registered Research Analyst. Please consult a SEBI-registered financial advisor before making investment decisions.