FSL - Fundamental Analysis: Financial Health & Valuation

Last Updated Time : 19 Sept 25, 2:16 pm

Fundamental Rating: 3.7

📊 Core Financials Breakdown

Profitability

ROCE: 16.9% and ROE: 15.3% — solid returns, indicating efficient capital deployment.

EPS: ₹6.61 — decent, but not strong enough to justify the high valuation.

PAT Qtr: ₹135 Cr vs ₹92.4 Cr — strong 42.6% quarterly growth, showing operational momentum.

Balance Sheet & Leverage

Debt-to-Equity: 0.32 — manageable leverage, not a concern.

Book Value: ₹36.4 — implies a P/B ratio of ~10.3, which is expensive.

Dividend Yield: 1.07% — modest, but consistent.

💰 Valuation Metrics

Metric Value Comment

P/E Ratio 62.7 Significantly above industry average (37.9) — overvalued

PEG Ratio -161 Negative PEG suggests unreliable or distorted growth expectations

Intrinsic Value ~₹320–₹340 CMP is slightly above fair value zone

Valuation is stretched, especially with a PEG ratio that signals caution.

🏢 Business Model & Competitive Edge

Sector: Business Process Management (BPM) — tech-enabled services across healthcare, BFSI, telecom, and media.

Strengths

Diversified global presence (India, US, UK, UAE).

Strategic partnerships (e.g., Guidehealth) and acquisitions (e.g., Pastdue Credit Solutions) to expand capabilities

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Strong quarterly profit growth and improving margins.

Challenges

High valuation multiples.

Slight decline in FII holding (-0.49%) — mixed institutional sentiment.

PEG ratio and P/B ratio suggest the stock is priced for perfection.

📉 Technicals & Entry Zone

Current Price: ₹374

DMA 50: ₹361 | DMA 200: ₹347 — bullish trend intact

RSI: 59.2 — neutral zone

MACD: Positive — momentum building

📌 Suggested Entry Zone: ₹340–₹355

A dip near the 200 DMA would offer a better margin of safety.

🧭 Long-Term Holding Guidance

Hold if invested: Strong fundamentals, expanding global footprint, and healthy returns make it a viable long-term play.

Accumulate on dips: Ideal for investors seeking exposure to tech-enabled outsourcing and healthcare transformation.

You can explore Firstsource’s full financials and chart on TradingView or review brokerage reports and price targets on Trendlyne for deeper insights. Let me know if you'd like a peer comparison with Coforge or Mphasis.

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