Stock Performance and Market Context
The stock of Firstsource Solutions Ltd (Stock ID: 884842) touched an intraday low of Rs.272.05 today, representing a 4.66% drop on the day and a 4.71% decline overall. This marks the third consecutive day of losses, with the stock falling by 7.19% over this period. The current price is substantially below its 52-week high of Rs.403.80, reflecting a year-long downward trend.
In comparison, the BPO/ITeS sector, to which Firstsource belongs, has declined by 2.83% today, while the Sensex opened lower by 265.21 points and is currently trading at 83,783.87, down 0.53%. Despite this, the Sensex remains within 2.83% of its 52-week high of 86,159.02 and has recorded a 2.75% gain over the past three weeks. The Sensex is trading below its 50-day moving average, although the 50DMA remains above the 200DMA, indicating some underlying market resilience.
Firstsource Solutions Ltd’s stock is trading below all key moving averages — 5-day, 20-day, 50-day, 100-day, and 200-day — signalling sustained downward momentum. The stock has underperformed the market significantly over the past year, generating a negative return of 23.66%, while the Sensex has delivered a positive 10.00% return over the same period. This divergence highlights the stock’s relative weakness amid broader market gains.
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Financial Metrics and Operational Highlights
Despite the recent price decline, Firstsource Solutions Ltd continues to demonstrate solid financial fundamentals. The company reported its highest quarterly net sales at Rs.2,443.08 crores and achieved a 5.67% growth in operating profit in the December 2025 quarter. This marks the fourth consecutive quarter of positive results, underscoring consistent profitability.
The company’s Return on Capital Employed (ROCE) stands at an attractive 15.4%, with the half-year ROCE peaking at 14.81%. Operating profit to interest coverage ratio is robust at 9.31 times, reflecting a strong ability to service debt. The Debt to EBITDA ratio remains low at 1.50 times, supporting the company’s financial stability.
Valuation metrics indicate that Firstsource Solutions Ltd is trading at a discount relative to its peers’ historical averages, with an enterprise value to capital employed ratio of 3.5. The company’s PEG ratio is 1.1, suggesting that profit growth of 26.3% over the past year has not been fully reflected in the stock price.
Institutional investors hold a significant 34.39% stake in the company, having increased their holdings by 0.51% in the previous quarter. This level of institutional interest indicates confidence in the company’s fundamentals despite recent price pressures.
Sector and Market Position
Firstsource Solutions Ltd is the largest company in the Commercial Services & Supplies sector, with a market capitalisation of Rs.20,175 crores. It accounts for 40.23% of the sector’s total market cap and generates 43.62% of the industry’s annual sales, which total Rs.9,134.41 crores. This dominant position underscores the company’s importance within the sector.
However, the stock’s recent underperformance relative to the BSE500 index, which has delivered a 12.64% return over the past year, highlights challenges in translating sector leadership into share price gains. The stock’s 23.66% negative return contrasts sharply with the broader market’s positive momentum.
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Mojo Score and Rating Update
Firstsource Solutions Ltd currently holds a Mojo Score of 56.0, with a Mojo Grade of Hold. This represents a downgrade from its previous Buy rating, which was revised on 29 December 2025. The market cap grade is 3, reflecting its status as a large-cap company within its sector.
The downgrade in rating aligns with the stock’s recent price weakness and relative underperformance, despite the company’s stable financial metrics and sector leadership. The Hold rating suggests a cautious stance given the current market conditions and stock price trends.
Summary of Key Price and Performance Indicators
To summarise, Firstsource Solutions Ltd’s stock has declined to Rs.272.05, its lowest level in 52 weeks, after a three-day losing streak. The stock is trading below all major moving averages and has underperformed both its sector and the broader market indices over the past year. While the company’s financial results remain positive, with growth in operating profit and strong debt servicing capacity, the share price has not reflected these fundamentals.
The broader market environment shows mixed signals, with the Sensex near its 52-week high but currently trading lower, and the BPO/ITeS sector also experiencing declines. Firstsource’s dominant market position and institutional backing provide some stability amid these pressures.
Investors and market participants will continue to monitor the stock’s price action and financial disclosures closely as the company navigates this period of subdued market performance.
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