Questions across 8 calls

Ritesh Idnani

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Firstsource Solutions Limited

Firstsource Solutions Limited CC-May26.pdf · 2026-05-06

Thank you Vibhor for that question. Look, let me start by saying that, we've seen this macro duality for some time . The degree keeps shifting every few months and sometimes every few weeks. One thing to bear in mind is that the traditional business process services are not as linked to discretionary spend as the traditional IT services side; that's one part of it . A substantial part of the business therefore ends up being annuity and recurring, giving a greater visibility if you will. What I will say is that in some sense the recent developments and the pace of advancement on the AI side, if nothing else, has structurally expanded the addressable market for players such as ourselves. And one of the things I talked about is what we have been seeing over the last few months where we are perceived as a consulting partner who doesn't just advise but also implements, doesn't just implement but also runs, and doesn't just run but also transforms. That's the core of what "Intelligence that operates" represents, that we're able to do this in one single continuous motion. And I think when we're doing that, what it does is it expands the surface area of what is available for us in terms of the TAM itself, because we're getting called in for deals that maybe three years back, if we were perceived as a deep domain BPM player in regulated markets, today I think we're seeing a lot of opportunities that cut across different areas itself, and that expansion o f surface area is certainly something that I think clients appreciate because they want one single continuous motion towards underwriting the business outcomes. So I think that's one part of it. I think the second part of it is related to the opportunity to expand share and take share from competitors itself, and I certainly we're seeing opportunities out there where the ability to play on offense -- and that has been a consistent theme that we've been saying now for at least ever since I've been at Firstsource, that look, when you end up having technology and macro shifts, it creates a dichotomy in terms of how different players operate. And certainly challenger brands such as ourselves have the opportunity to play on offense and adapt sooner, and that in turn allows you to take share away from other players in the marketplace on the back of very specific value propositions targeted towards the industries in which we have domain depth etc. And I think that combination is certainly yielding results as well. And I think third is in certain, some of the markets in which we operate, the degree of insourced that might have existed in the past, people are probably willing to look at many more options and as long as you're willing to go to them with a compelling proposition and a creative commercial construct, I think those are certainly again allowing them to evaluate different opportunities and maybe give us a sizable part of the pie as well. So, I think it's a combination of all these three: the value proposition, the share shift that we can impact, and the expansion from potentially what might be an insourced portfolio to a larger share of the pie.

We certainly think, Vibhor, the opportunity exists and here's why . I mean, if you talk to folks in Silicon Valley, I think they will assume that everything can be automated overnight. And that's what sometimes paints the scenario that hey, what does this mean for the industry and you've seen this with data that's reported that the industry is continuing to hold its own, certainly for some players in the market in terms of growth and so on and so forth. But a lot of it is because when you get under the hood of client operations, particularly go to a large bank, go to a large telco, go to a large health plan and I'm just giving you three distinct sectors which are regulated in nature, data quality is not w here it needs to be. So you can't just go overnight and automate their operations or even have agentic operations run autonomously etc. So, there's a significant amount of scaffolding work that needs to happen to ensure that the operation is ready for prime time. The determination of which processes are legible for even an agentic operation requires work. The determination of what kind of sec urity guardrails need to be in place is an opportunity. The determination of where should the process overrides be with a human in the loop is an intentional exercise. All of these are the scaffolding that needs to be put in place to ensure that you can actually truly get to the end state itself. And our view is that that's creating, expanding surface area in terms of the places where we can play.

Firstsource Solutions Limited CC-Nov25.pdf · 2025-11-04

Thank you for the question, Girish. Look, the Q2 performance was in line with our expectations for the business as a whole. In specific parts, the growth may have been higher or lower versus estimates, but that's true for every quarter that you end up seeing.

You know, what I would always recommend here is, suggest to look at the trend in client bucket movement on a YoY basis and over a slightly longer-term time horizon, because the QoQ movement could be misleading or there could be changes that could happen because of currency movement, it could be because of a program ending or as we have been highlighting in some instances due to business shifting, particularly from an onsite delivery to offshore or nearshore, as has been the case for some of our UK-based large clients itself. But I wouldn't read anything further into that.

Firstsource Solutions Limited CC-Dec24.pdf · 2025-02-07

Thank you, Manik. Let me just give you a flavor of some of the deal wins. So, if you go back in time, right, I think over the last five quarters, we have consistently had a series of large deal wins, and our pipeline has consistently trended upwards itself. The deal wins that we got in Q3 FY24 and Q4FY24, some of them started to yield results, and you started to see that in the revenue numbers come with maybe a one, two quarter lag, depending upon the specific nature of those deals itself . Each of these deals is different. Sometimes it requires an upfront assessment and implementation. Sometimes it's a gradual ramp. Several of these deals have commercial models which are linked to the outcomes itself. So, they don't necessarily follow always a linear path. What we feel encouraged about is the momentum that we have with the large deal wins, and we think that it will follow a similar pattern to what's laid out for the deal wins that we saw in FY24 in the later part, second half, translating into the kind of momentum and growth that we saw in FY25. And some of the deal wins that we are seeing now, moving pretty much the same way going into FY26 as well. Dinesh, you want to take the second question?

So, let me first state at the outset that we do expect the 50 to 75 basis points playing out in FY26. So, in line with what we have consistently stated . And, what you are also seeing is the fact that with the kind of momentum that we are experiencing in the marketplace and the growth that's there, some of the investments that we made, we had to continue to move forward some of the investments that we are seeing with the growth that is there , some of it is the cost of growth etc. as well. But if you also see pretty much over the last two quarters, you are seeing about a 5/10 bps improvement QoQ from a margin standpoint while we continue to make those investments itself. So, I think what you will see from us is, and I want to almost take a sneak peek into how we are thinking about potentially next year, we want to have industry -leading growth, but while we continue to expand margins as well , and I think that will be the storyline how we are thinking about the business going forward.

Firstsource Solutions Limited CC-Sep24.pdf · 2024-10-28

Thanks, Manik, for your questions. Let me first provide some color on the outlook. You know, before we started Q1 or FY25 itself, our guidance was 10% to 13%. If you realize at the end of Q1, we updated the guidance to 11 .5% to 13.5%. And the question that I was asked then also is, what's your view on the outlook? And I am going to reiterate some of the points I made then because it's kind of consistent in a way. When we provide guidance, it's based on our line of sight on the business at that point in time and at this stage over the next two quarters of FY25 as it stands today. So, I don't want to qualify it in any manner or comment on what this might translate into in terms of QoQ growth calculations. But what I have said earlier and which continues to remain consistent is our guidance does not build any changes in the macro environment. And if there is something out there, that's potentially an upside. We are also keeping our focus at this stage on supporting our clients proactively in their transformation agendas and identifying opportunities to expand our footprint, both within our existing clients as well as new logos. Our sales engine is chugging well. I feel confident of our revamped go -to-market strategy as well as the rigors that we are bringing in our execution. And that's frankly what gave us confidence to raise the guidance to 14.5% to 15.5% organically, excluding the 5% contribution that we expect from Ascensos for the rest of the year. So , I will leave it at that in terms of what I end up seeing. Your second question was related to the headcount. Ascensos gave us close to about 2,500 people. The rest of it is all organic. And that's in terms of the breakdown of the headcount that we added through the bottom.

So, again, my comment would be fairly simple in some sense that at this stage, this is the visibility that we have and we are not going out there to update what might be a guidance at the end of every quarter itself. As you know, this was a medium -term aspiration that we had put out there, which is that we would look to hit a billion-dollar run rate business by Q4 of FY26. Obviously, we have had good growth in the first two quarters, but I would leave it at that and probably come back as the environment around us becomes more visible.

Firstsource Solutions Limited CC-Jun24.pdf · 2024-07-30

While I don’t want to talk about a specific client, but what I can tell you is that we continue to engage very actively with all of our large clients in this vertical and we continue to gain new business from them. Specifically on our top client, you ’re aware that we are working on moving some components of the work from onsite to offshore and this transition is happening in phases. So, there could be some volatility on a quarter -on- quarter basis, but I wouldn ’t read too much into it. On a full-year basis, it’s in line with our estimates and it ’s already factored in our guidance. So, there ’s nothing new out there that you need to think about there. It’s in line with our guidance that we provided in the beginning of the year. At the same time, what I also want to talk about is our CMT vertical from an overall pipeline standpoint continues to be very robust and we are seeing traction both in the Telecom & Digital Media space, as well as in the EdTech side, and finally in the Consumer Tech side. So, we are seeing a broad-based growth across all the three sub-segments out here and you will see some logo conversions in the coming quarter as well.

So, let me start at the outset by saying, we do expect the Healthcare vertical to grow above the Company average for the year, and we do expect that growth to be largely driven by the payer segment, and #3 we expect the growth in the payer segment to be broad-based across a wide range of clients as opposed to a particular client itself. So, those are three comments that I just want to make right at the outset. On the payer side, what I think is helping us is the fact that our strategy to focu s on strategic accounts is playing well and we had good deal wins in the space even in Q1. What you have seen some of the growth that we experienced in Q1 is a function of the deal wins that we had in the last three quarters and a lot of that ramp continue s to happen in phases. So, it’s not like everything is fully out there. But at the same time, we also see a very healthy pipeline in the payer segment and that’s what makes us confident about the outlook for the segment itself. On the provider side, we are focused on broad basing our portfolio. So, we are quite excited by the potential in the offshore RCM market where the QBSS acquisition now allows us to aggressively compete with the technology -led end-to-end capability on the RCM side. We had two joint deal wins in the quarter, which is a validation of the rationale for acquiring QBSS in the first instance and I think we continue to build up on top of that.

Firstsource Solutions Limited CC-Mar24.pdf · 2024-05-03

Thank you Shradha for the question. If I look at the outcome from Q4 of FY24. One of the elements that I talked about in my opening remarks was the fact that our growth in the quarter was broad based across verticals and geographies. Number two, we have added several new logos across industry verticals and not just restricted to one or the other. And number three, we have had good client traction as well as wins in existing accounts across all industry verticals itself. That gives us confiden ce that the growth that we will see in FY25 will be broad based across verticals and geographies.

So, without getting into specific s Shradha, what I will say is our mortgage business segment was largely stable in Q4. That may be the typical quarterly volatility in that part of our portfolio, but if you look at what we have been seeing, we have been making concentrated efforts to proactively increase our footprint, both from a market segmentation standpoint, beyond mono liners to mid -tier and regional banks, as well as expand our service portfolio into the servicing and HELOC market. And even venturing i nto adjacencies on the real estate vertical side. We feel that our efforts in those areas are getting results with some of the wins that we have had in the last two quarters. So, while there may be quarterly aberrations which are difficult to call out, we think we are well on track in terms of weather proofing our business from a longer term perspective, and continue to be encouraged by the wins that we are seeing in the financial services side, including the mortgage segment.

Firstsource Solutions Limited CC-Dec23.pdf · 2024-02-07

Thank you, Manik, for the question. Let me try and address the questions one after the other. The first question that you had was in terms of what we are seeing in the macroeconomic environment itself, client spend, volume so on and so forth. Let me just start by saying we still see the macro duality in some sense still playing out. What I mean by that is on one hand, while clients remain cautious in the uncertain macro environment , we also find that they are actively moving on programs where they see opportunities for meaningful cost optimization not just by leveraging outsourcing and offshoring but by reimagining the process itself and bringing in elements of technology including AI and automation. We have seized that opportunity and continue to engage with both our existing clients as well as exploring new logos with solutions that create value for them. So, that duality in my mind is likely to continue either which way. The second question that you had was related to the insourcing side. Actually , let me just take a step back and share with you how I see this trend in a larger context. The narrative for insourcing or global capability construct s in the last 12 months has moved from pure cost arbitrage to co-location and co -innovation. And here, there is a little bit of a paradox on one hand. Between 200 to 250 new centers are being established every year across various GCC hubs. Out of these about 55 to 65 % are de novo. That is the enterprise is setting up their own centers, but the rest are provider assisted. And the newer provider supported global capability centers even in an in sourced environment our focus around collaboration, around cutting-edge tech and proxies, b ut what we're also seeing is a growing numbe r of clients who are exploring divestitures of their offshore capital. In fact a number of such cases today is almost 5x of normal years and even more than what we saw post the global financial crisis. Part of this has to do with the impact of higher interest rates on working capital and thereby expensive debt servicing which is pushing companies with global capital footprints to consolidate and divest to free capital itself. The other part has to do with the advent of AI and the uncertainty arou nd its impact making companies rethink their entire strategy of deploying large pools of res ources on their roads. As Firstsource what we are trying to do is to position ourselves to take a dvantage of both these trends. We've created a comprehensive playbook when clients want to in source that has components of design, build and operate in partnerships with real estate firms, global talent agencies, and legal and regulatory advisors. This makes it easier for us and clients to get off the ground quickly and reap the benefits of colocation and co-innovation. We've also set up a team to focus on divestitures, especially in sectors we operate in and the geographies we operate in or on our radar itself. So, we think a combination of both of those allows us to take advantage of either the insourcing flat setting up for global capability centers or on the other hand it allows us to take advantage of what might play out in terms of captive divestitures itself. The third question that you had was related to the leadership and the off design and so on and so forth. We've rolled out the new o rg. structure effective from first of Jan. Portfolio alignments as I discussed in my initial commentary at the market and capability unit levels have happened. We're now firmly in execution mode. Having said that look there are still areas where we continue to explore the right talent. W e'll keep making interventions as and when we see a requirement itself.

Let's talk a little bit about the healthcare segment itself. So, on the provider side I do expect that the buildup of enrollment will be gradual over the next 9 to 12 months, but on the provider side what we have focused on is on broad basing our portfolio. We are quite excited right now by the offshore revenue cycle management market where we believe that the current wave of tech led disruption is providing an opportunity for us to take share away from traditional revenue cycle management players who have largely built a people-based business. Similarly, on the payer side our strategy to focus on strategic accounts is playing well. We had good wins in this space in the third quarter and we see a very healthy pipeline as well. Therefore, we expect good growth momentum in the healthcare verticals in the coming quarters.

Firstsource Solutions Limited CC-Sep23.pdf · 2023-11-08

And let me address the question that you asked, Manik, on the onshore to offshore mix itself. I think the comment you made is a valid one. But at the same time, while we've been focusing on it for some time, and what you will see in the recent past is we've had a pos itive move in terms of just increasing the mix by a couple of percentage points. I still see opportunities for improvement there. But you're also right, it's not going to come just on account of moving existing work to offshore, but also in terms of new bu siness that comes, which will also move offshore as well. One of the things to bear in mind in the world we live in is this is not going to be just about labor arbitrage, but also technology arbitrage that I think is going to come into play with how we're able to render services to our customers. And I think that's something that's going to be very critical. Number two is several of our customers continue to appreciate the fact that they're able to offer that blended delivery model itself. So on one hand, we are looking at right -shoring resources wherever relevant and optimizing our current delivery infrastru cture. But at the same time, one of the things that also creates differentiation for us in the marketplace is the fact that we have a blended delivery model. So in summary, we do expect runway and improvement in the onshore-offshore mix, but at the same time, it's going to come also from expansion of our existing business and adding new business.

Well, I think it's coming on a few different accounts, right? So one of the things that I think is gaining traction and currency for us in the payer segment is the fact that, a, we work with a lot of great logos in those accounts itself, right? So we have a good existing client mix that's there as well as a very solid pipeline in terms of new logos that we are going after where we have a seat at the table. What we are seeing in several of these existing accounts is we might be there in one or two of the functional areas and there's an opportunity to extend and expand our footprint, gain more share of wallet, be able to integrate what we do, particularly on the back of the digital intake platform that we have, which allows us to have end-to-end capabilities across, as an example, maybe digital intake and these are some of the capability sets that create competitive differentiation for us in the marketplace. C lients are very receptive to that in the payer space. They are looking to optimize the way they run their business, and this creates opportunity for us to be a value-added partner to them. So the ability to combine technology and operations in a meaningful way, drive transformation in that portfolio and deliver an outcome, I think, creates opportunities for us to be beneficiaries of the kind of pipeline we're seeing in the payer segment.