Firstsource Solutions Limited (NSE:FSL) Released Earnings Last Week And Analysts Lifted Their Price Target To ₹352

Firstsource Solutions Limited (NSE:FSL) shareholders are probably feeling a little disappointed, since its shares fell 3.6% to ₹338 in the week after its latest quarterly results. It was a pretty mixed result, with revenues beating expectations to hit ₹19b. Statutory earnings fell 3.6% short of analyst forecasts, reaching ₹1.96 per share. This is an important time for investors, as they can track a company's performance in its report, look at what experts are forecasting for next year, and see if there has been any change to expectations for the business. So we gathered the latest post-earnings forecasts to see what estimates suggest is in store for next year.

Check out our latest analysis for Firstsource Solutions

Following the latest results, Firstsource Solutions' ten analysts are now forecasting revenues of ₹78.3b in 2025. This would be a solid 12% improvement in revenue compared to the last 12 months. Statutory earnings per share are predicted to expand 15% to ₹8.90. Before this earnings report, the analysts had been forecasting revenues of ₹74.3b and earnings per share (EPS) of ₹8.78 in 2025. So it looks like there's been no major change in sentiment following the latest results, although the analysts have made a slight bump in to revenue forecasts.

The analysts increased their price target 9.3% to ₹352, perhaps signalling that higher revenues are a strong leading indicator for Firstsource Solutions's valuation. That's not the only conclusion we can draw from this data however, as some investors also like to consider the spread in estimates when evaluating analyst price targets. The most optimistic Firstsource Solutions analyst has a price target of ₹400 per share, while the most pessimistic values it at ₹280. Analysts definitely have varying views on the business, but the spread of estimates is not wide enough in our view to suggest that extreme outcomes could await Firstsource Solutions shareholders.

One way to get more context on these forecasts is to look at how they compare to both past performance, and how other companies in the same industry are performing. It's clear from the latest estimates that Firstsource Solutions' rate of growth is expected to accelerate meaningfully, with the forecast 26% annualised revenue growth to the end of 2025 noticeably faster than its historical growth of 10% p.a. over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to grow their revenue at 15% per year. It seems obvious that, while the growth outlook is brighter than the recent past, the analysts also expect Firstsource Solutions to grow faster than the wider industry.

The Bottom Line

The most obvious conclusion is that there's been no major change in the business' prospects in recent times, with the analysts holding their earnings forecasts steady, in line with previous estimates. Pleasantly, they also upgraded their revenue estimates, and their forecasts suggest the business is expected to grow faster than the wider industry. We note an upgrade to the price target, suggesting that the analysts believes the intrinsic value of the business is likely to improve over time.

Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. We have estimates - from multiple Firstsource Solutions analysts - going out to 2027, and you can see them free on our platform here.

Even so, be aware that Firstsource Solutions is showing 3 warning signs in our investment analysis , you should know about...

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.