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FSOL’s FY26 annual report highlights the company’s continued transition toward an AI-led, domain-focused BPM provider, with focus on driving highervalue transformation engagements and strengthening domain capabilities. KTAs:

1) FSOL signed 17 large deals in FY26, with deal quality improving as engagements become increasingly multi-tower, cross-border, and outcomebased.

2) ~50% of revenue is now linked to non-linear, outcome-aligned commercials.

3) FSOL launched Kairos, a vertical-native AI platform that combines AI with its domain expertise and proprietary tech assets.

4) It completed capability-led acquisitions of PDC (UK collections) and TeleMedik (US clinical management) to strengthen BFS and Healthcare capabilities, respectively.

5) It added 47 new logos (BFSI  17; Healthcare 12; CMT  13; Diverse including 24 strategic logos, reflecting broad-based client traction.

6) Cash conversion improved to ~78%.

7) FSOL increased dividend payout to ~57% (vs 8Y average of ~51%). The company guides for 10-13% CC revenue growth (implying CQGR of 1.9-3.0%; including 2-2.5% contribution from PDC and TeleMedik) and EBITM of 12.25-12.75% for FY27, targeting 14-15% over the next 3-4 years. We retain ADD and TP of Rs250, at 16x Jun-28E EPS.

Positioning itself to benefit from industry shifts

BPM is seeing three key shifts that are reshaping the industry:

1) Companies are moving beyond labor-based outsourcing and looking for partners that use AI and data to improve outcomes.

2) Enterprises are struggling to move AI from pilot projects to large-scale deployment, creating a gap between early adopters and the rest.

3) Regulations are driving demand for providers with strong domain expertise and well-governed AI solutions. We believe FSOL is well placed to benefit from these trends, given its focus on regulated industries and specialized service offerings.

Improving quality of large deals to broaden scope of work

FY26 saw improving quality of large deal wins rather than simply higher deal activity. FSOL signed 17 large deals in FY26, with the closing pipeline crossing $1bn. Unlike traditional BPM contracts focused on a single process, these deals have been broader in scope, covering multiple services and geographies instead of individual outsourcing contracts. Commercial models are also gradually moving toward outcome-based pricing rather than traditional FTE-based billing. This indicates that clients are engaging with FSOL for larger business transformation programs, which should enhance client stickiness, increase cross-selling opportunities, and improve revenue visibility over time.

AI initiatives take shape as FSOL builds vertical-specific AI capabilities

AI became more embedded into FSOL’s operating model during FY26, transitioning from experimentation to commercial deployment across core client workflows. FSOL launched Kairos, its AI-led delivery platform, initially for healthcare payer engagements, with plans to expand across verticals. It also introduced Agentic AI Studio for developing and orchestrating AI agents, and Gigsourcing Platform to enable flexible workforce deployment. In addition, FSOL has scaled its Mortgage Language Model to process over 2mn mortgage loans annually. It continues to focus on building vertical-specific AI solutions integrated into core client operations rather than standalone Gen AI offerings.

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