Kotak initiates coverage on Firstsource Solutions stock with Reduce rating

Published 22/08/2025, 08:58
Kotak initiates coverage on Firstsource Solutions stock with Reduce rating

Investing.com - Kotak has initiated coverage on Firstsource Solutions (NSE:FISO) Ltd (NSE:FSOL) with a Reduce rating and a price target of INR375.00.

The research firm cited rich valuations as a concern, noting that the stock trades at 29X FY2027E PE despite potential disruption in parts of the business.

Kotak forecasts an 11.7% organic constant currency revenue CAGR for Firstsource Solutions over FY2025-28E, with a 90 basis points EBIT margin expansion to 11.9% during this period.

The company’s renewed focus on strengthening go-to-market presence, expanding offerings, and promoting cross-selling within existing clients is expected to drive sustained improvement in revenue growth, according to Kotak.

The research firm projects a robust 22.2% EPS CAGR over the FY2025-28E period for Firstsource Solutions, while valuing the company at 27X September 2027E PE for its INR375 fair value target.

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