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Year of Transformation Key takeaways from CEO address Vipul Khanna, CEO addressed the importance of the company’s ‘Digital First, Digital Now’ approach that enables an automated driven, workflow-driven, decision-engine and analytics-driven, platform coupled with key partnerships which continuously modernize its offerings. For a successful long-term digital strategy, the company is building a robust product roadmap by leveraging its market leading BPaaS capabilities. (Example: Digital Collections and Post-closing Solution for the mortgage industry). It is also targeting “Born Digital and Digital First” companies across its selected areas.

Commentary encouraging across Verticals BFS segment (52% of rev) advanced by 59% YoY, with the addition of over 30 new clients in mortgage business. Low interest rate environment led to flourish of origination business and steadily expanding mortgage servicing business. Growth from BFS segment is expected from Digital Collections offering and emerging segments like ‘Buy Now Pay Later’ companies. In Healthcare segment (27% of rev), the acquisition of PatientMatters (Healthcare revenue cycle management company), has consolidated the market and positioned the company to capitalize on growth opportunities. Expects Provider business to gain traction as consumers look to complete their deferred treatment, as economy returns to normal. Growth momentum in Health Plans and Healthcare Services to continue due to adoption of remote monitoring platforms and telehealth services. In Communications, Media and Technology segment (19% of rev), the company is focusing on the flourishing streaming market and expanding its presence in US markets, including the media and tech industries. The company is optimistic about the segment's growth spurred by its pipeline and increased capabilities. Strategy for driving high sustainable growth includes 1) Focused on specific sub-segments within the three core verticals: BFS, Healthcare and CMT, and 2) Driving sales and operational excellence in a virtuous cycle. Firstsource is committed to building a sustainable business and company’s well balanced industry portfolio combined with agile operating model and continuous focus on digital will help to drive growth in the future.

View FSL guided for 15%-18% growth in revenues in CC terms for FY22 and OPM band of 11.8%- 12.4%; citing robust demand environment across existing and new client relationships across verticals (ex-refinancing). Despite some expected slowdown in re-finance and a quarter impact in Collection volumes (in US) in FY22, FSL is confident for strong growth based on robust new client additions (54) in FY21 and revival of volumes and new opportunities in Healthcare and CMT vertical. Strong growth guidance supported by Robust client additions and improved profitability (implies 10-50bps gains) that too on a very strong base growth of ~18% in FY21, justifies significant re-rating of the stock. Factoring the same, we maintain our Accumulate rating with TP of Rs200 (valued at 20x PE on FY23E EPS of Rs 9.9).

CMP Rs 205

Target / Downside Rs 200 / 3%

BSE Sensex 53,137

NSE Nifty 15,924

Scrip Details

Equity / FV Rs 6,961mn / Rs 10

Market Cap Rs 143bn

US$ 2bn

52-week High/Low Rs 209/Rs 41

Avg. Volume (no) 5,452,980

NSE Symbol FSL

Bloomberg Code FSOL IN

Shareholding Pattern Mar'21(%)

Promoters 54.0

MF/Banks/FIs 10.9

FIIs 9.8

Public / Others 25.4

Company Relative to Sensex

VP - Research: Rahul Jain Tel: +9122 40969771

E-mail: [email protected]

Associate: Divyesh Mehta Tel: +91 22 40969768

E-mail: [email protected]

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Firstsource Solutions

Reduce

July 16, 2021

July 16, 2021 2 Firstsource Solutions

Commentary by Chairman – Dr. Sanjiv Goenka Segmental Performance: Banking & Financial Services (BFS) business continues to grow positively, led by the Mortgage business (grew 52% YoY). However, substantial softening of the healthcare business during the year given lower volumes in elective surgeries (segment revenues declined 4% YoY). However, significant growth potential is emerging out in telehealth and remote monitoring in the Health Plans and Healthcare Services (HPHS) business, offsetting reduced claim volumes. Additionally, due to increased demand from top clients and acquisitions of new clients, Communications, Media and Technology segment (CMT) continued its growth trajectory after very soft Q1 (FY21 – CMT revenues declined 2% YoY). The company hired record number of new employees (6,800 – growth of 32%) during FY21 on FY20 base of 21,200.

Execution strategy: In order to maintain its rapid growth, the company will continue to invest in its people and technology capabilities and enter new-age markets (FinTech, HealthTech, Streaming, Digital Media, etc.). Growing partnerships with industry leaders enable the company to confidently offer its clients unique cutting-edge solutions. This is well supported by its ‘Digital First, Digital Now’ approach to enhance value proposition. Its focus on providing solutions with purposeful outcome for both clients and their end customers results in better client engagement and wider range of solutions execution.

Outlook: The foundation for sustained progress was laid in FY21 (17.9% in CC terms). Healthcare sector is expected to recover significantly this year, along with sustainable growth in BFS and CMT sector. The company is leveraging its digital and cloud capabilities and size, to consolidate its presence across the segments that it operates in.

Industry Growth With the pandemic affecting demand across all industries and segments, 2020 saw retrenchment of 4% in global IT services spending to USD 692 Billion. Additionally, the global IT sourcing market dropped 0.8% to USD 120-122 Billion. Growth in IT-BPM industry is expected to bounce back in 2021 rising digitization and adoption of advanced technologies (Cloud & Analytics, RPA, IoT, AI, ML, and Hyper-automation). The global BPM market stood at USD 243 Billion in CY2020 and is expected to grow at 6-8% rate till 2025, reaching USD 336 Billion, driven by rising adoption in newer segments and wallet-share expansion for BPM within existing segments. Approach for accelerating growth across verticals: 1) Propel new client acquisitions and growth of existing accounts by driving sales and better account management 2) Adjacent markets Expansion and 3) Inorganic growth via M&A. Navigating through Covid-19 The deployment of remote working to thousands of employees was completed within days by the company. In order to run delivery centers and provide seamless customer experience, the company implemented cutting-edge hybrid infrastructure and deployed innovative remote management platforms. It also made an investment in building a good virtual and remote experience across the employee lifecycle. The Company upskilled its managers in remote management, developed mobile-friendly e-learnings, and implemented gamified and video communication modules for onboarding and ongoing communication, resulting in productive and consistent experience for its employees and customers.


Key Industry lines wise commentary

Banking financial services: (52% of revenues)

Opportunity: The surge in digital banking provides a tremendous opportunity for banks to get connected closely to their customers and understand and anticipate their needs. The market size of the US debt collection industry is expected to be USD 13.4 Billion in 2021. As per Mortgage Bankers Association (MBA), for CY21 the refinancing volume is expected to be 67% higher and the home purchase volume is expected to be 10% higher compared to CY19. Challenges: As a result of the global health crisis, demand for banking services declined in 2020. Virtualized solutions and secure work-from-home (WFH) models became a priority for business continuity in this segment. Solution: The company offers end-to-end solutions across various segment Retail banking (customer experience, transaction processing), Mortgages (loan processing, servicing, title and valuations), Complaints and Remediation (complaints handling, fraud management), Credit cards and Fintech companies (collections) and Commercial finance (invoice factoring, risk management). It also offers end-to-end solutions to institutions across the customer lifecycle, including acquisition, account servicing, collections and retention, complaints handling and remediation, mortgage processing and invoice financing, and asset-based lending. The company’s digital debt collections platform, coupled with Digital First, Digital Now approach, caters to various industries, including Credit Cards, BNPL, Auto Financing, Education. Healthcare (26.5% of Revenues) During FY21, the company renamed its Healthcare Payer business to Health Plans and Healthcare Services (HPHS) to reflect its broader scope. It also consolidated healthcare Provider brands, MedAssist and PatientMatters under the Firstsource Provider business to reflect better alignment with its core brand. The Company continues to invest in building its platforms and driving their adoption in the market. Digital solutions in healthcare have been slow to take hold in the past; however, the future is shaping up to be heavily influenced by technology and innovation. Healthcare providers and health insurers are expected to invest increasingly in digitalization and predictive analytics in FY21 to better prepare for future unexpected challenges. Health Plans and Healthcare Services Opportunity: Digital solutions will be instrumental for success in the post-COVID era. Payers who have a tech-first mindset will have a strategic advantage. Challenge: The pandemic further complicated existing processes around claims coding, billing, adjudication, and increased employee workload. Health Plans wants to reduce the cost of care, streamline network management, improve member experience, and adopt transparent claims administration process. Solution: The company’s focus in this segment is to scale and leverage fit-for-purpose platform-based solutions to streamline processes and deliver underlying efficiencies. Its interventions in Digital Intake, Digitally Empowered Contact centers, Telehealth, and Remote Patient Monitoring are enabling health plans to drive greater efficiencies and offer more member-friendly processes. Provider Services


Opportunity: Telehealth Services market in the US grew at CAGR of 14.6% between CY16-21 to reach at USD 3.5 Billion in 2021 and is expected to grow at CAGR of 31.2% CY20-25. In 2021 and beyond, federal funding for Medicare and Medicaid is forecast to increase, creating growth opportunities for the industry. Medicare and Medicaid funds are projected to rise in 2021 and beyond, providing opportunities for growth. Challenge: Higher uncompensated care cases due to rise in unemployment resulting in large section of the population losing their insurance. Providers face challenges in complying with the CMS guidelines. Healthcare Providers are also struggling with managing the self-pay component of their revenue. Solution: A mix of technology and human touch makes Firstsource's full-service revenue cycle solutions for eligibility, enrollment, business office management, and recovery simpler for patients. With PatientMatters’s acquisition, the company expands its Provider Business and offers SaaS capabilities to help the Healthcare RCM industry address frontend patient responsibility. All these solutions along with proprietary patient engagement solutions (MFocussm and MGagementsm) will deliver an end-to-end platform-based solution for patient’s financial experience. Communication, Media and Technology (19% of Revenues) Opportunity: In Europe and the United Kingdom, the interest in faster internet services increased dramatically. The penetration of high-speed fiber is expected to more than double by 2026, reaching 202 million homes. The COVID-19 standard has already led many production houses to use virtual reality technology in order to shoot movies and shows. Challenge: Complicated customer churn and acquisition cycle. Better understand customer behaviors and needs to meet customer needs and increase customer retention. Trend: Due to lockdowns and physical distancing norms, people's social lives shifted online, and entertainment consumption skyrocketed. Online gaming and over-the-top (OTT) services are growing fast within home-based segments. Consumer behavior has changed as viewing TV and video on OTT is considered as non-discretionary spend resulting in emergence of new business models. Utilities (2.4% of revenues) Opportunity: They are now looking to partner with technology vendors to provide digital solutions to thrive in the long run. Utility companies are targeting the adoption of RPA, Augmented and Virtual Reality, IoT, Big Data Analytics, AI, Chatbots, Digital Twin, drone technology and cloud-based solutions to facilitate digital transformation, safeguard business continuity, and enhance customer experience. Challenge: The shift to working from home is putting utility companies on the front line with drastic changes in demand and workforce management challenges. It is imperative to integrate next-gen technologies across the value chain to address these challenges. Solution: By combining a distributed workforce with an omnichannel customer-engagement model powered by Intelligent Automation (IA) and cloud-based platforms, Digitally Empowered Contact Centres (DECCs) reduce costs and increase customer satisfaction.


Changes in key factors in FY20

Key Management Exits: No changes Induction: No changes

Board of Directors

The following changes happened on the Board of the company: Mr. Pradip Roy ceased to be an Independent Director after completion of two consecutive terms.

Mr. Anjani K. Agrawal appointed as an additional Non-Executive, Independent Director from May 11, 2021 for three consecutive terms.

Mr. Subrata Talukdar retires by rotation and offered himself for re-appointment at the ensuing AGM

Auditors No Change. Deloitte Haskins & Sells LLP. continues to be the Auditors of the company.

Credit Ratings Long Term Issuer Rating maintained at ‘CARE A1+’ with a stable outlook by CARE Rating.

Short Term facilities with A1+ rating by CARE Rating.

Pledged Shares No Change

Shareholding Pattern

Particulars FY20 FY21 CESC Ventures Ltd 53.90 53.72 Individuals 21.62 19.99 Bodies Corporates 3.00 1.16 Mutual Funds 7.46 11.92 FII 9.52 10.45 Banks 4.86 2.31

Macro-economic factors

FY21 was an abnormal year as the global economy witnessed an unprecedented decline in economic activity due to the once-in-a-century crisis unleashed by the COVID-19 pandemic. Global growth projections continue to improve due to the growing momentum in vaccine administration, demand recovery led by fiscal stimulus measures implemented by Governments, and gradual return to normalcy. However, a resurgence of infections at the beginning of 2021, especially from new virus variants, reimposition of lockdowns, logistical challenges with vaccine distribution, and uncertainty over vaccine takeup, continue to pose concerns for the global growth outlook.


Percentage Change in Remuneration of Director and KMP in FY21

Name & Designation % Change in

Remuneration in FY21

Directors

Mr. Vipul Khanna, MD & CEO* 82.89

Dr. Sanjiv Goenka, Chairman 33.33

Mr. Charles Richard Vernon Stagg 33.33

Ms. Grace Koshie 7.14

Mr. Pradip Kumar Khaitan 33.33

Mr. Pradip Roy (5.00)

Mr. Pratip Chaudhuri 30

Mr. Shashwat Goenka -

Mr. Subrata Talukdar (5.56)

Mr. Sunil Mitra -

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KMP’s

Mr. Dinesh Jain, President & CFO* (15.24)

Ms. Pooja Nambiar, CS & Compliance Officer 7.41

Source: DART, Company

Financial Performance

Profit and Loss Analysis

Revenues: Firstsource solution reported 17.9% YoY growth in CC terms largely led by strong performance within the US region (grew 37.2% YoY – 67.9% of rev) – primarily from BFS vertical. After accounting for Cross Currency impact, the company clocked revenue growth on 24.3% on reported basis.

Client: Strong growth was also witnessed in top 2 to 5 clients (grew 53.0% YoY – accounting for 25% of Rev).

Geographic Growth: US (67.9% of rev) grew 37.2% YoY and Asia (1.2% of rev) grew 9.1% YoY in USD terms. While UK (30.9% of rev) grew modestly by 3.4% YoY.

Vertical Growth: BFSI vertical led the growth at 59% YoY (52% of revenue), However, Diverse Industries declined 9.4% YoY (2.3% of Revenue). Healthcare (26.5% of revenue) and CMT (19.3% of revenue) grew modestly by 0.3% YoY and 2.2% YoY, respectively.

EBIT Margin increased by 90bps to 11.7% for the full year. Employee Expenses as a % of Rev increased to 68.3% in FY21 from 67.7% in FY20. The increase in cost is attributed to increase in number of employees across the globe increased employee base by 32% in view of strong existing and expected growth.

Exceptional Item: FSL signed Strategic Partnership with a leading client group in mortgage business wherein the client had options to get equity stake of (0-15%) in the mortgage business in lieu of higher volume thresholds. As FY21 was a breakout year for mortgage (revenue doubled and market share grew), Client achieved its top-metrics and has requested for partial early monetization of options which were ideally due in FY23. Thus, a charge of Rs. 1150Mn has been made as an exceptional cost in FY21 and another charge of $2mn is expected in FY22 this one is baked into operating expenses. The cash flow impact may happen in CY23 or earlier.


Net profit advanced by 9.5% to INR 3.6Bn. Net Profit margin declined by 120bps YoY to 7.1% (largely due to exceptional item during the period). EPS advanced by 30.6% to INR 6.4 per share.

Balance Sheet Analysis

Unsecured long-term borrowings increased to Rs. 845.52Mn in FY21 compared to Rs. 27.76Mn in FY20. Cash and cash equivalents stood at Rs1.4 bn up from Rs1.9 bn YoY.

Other Current Assets stood at Rs. 7.5Bn in FY21. Current Liabilities & Provisions increased from Rs. 9.1Bn in FY20 to Rs. 14.6Bn in FY21.

FSL has lease liability of Rs. 5.8bn in FY21 from Rs. 5.1Mn in FY20. on account of new premises taken on lease.

Constantly focus on reducing its receivables period by improving its collection efforts resulted in improvement in Billed DSO days from 50 days in FY20 to 41 days in FY21.

Other financial assets increased to Rs. 2.81Bn in FY21 from Rs. 2.15Bn in FY20, mainly due to increase in unbilled revenues.

Long-Term Borrowing witnessed increase from Rs. 21.58Mn in FY20 to Rs. 773.25Mn in FY21, as the company raised debt for equipment and asset financing.

Proportion of Trade Receivables which are considered doubtful decreased from 3.9% in FY20 to 3.2% in FY21. FSL has created full allowance for expected credit loss during both the years.

Cash Flow Analysis

Net cash flow from Operating Activities more than doubled for FY21 (137.7%) to INR 9.7bn in FY21. Operating cash flows were 19.1% (v/s 10.0% in FY20) of revenues and free cash flow at 223% (v/s 87% in FY20) as a % of net Income.

Capex increased to Rs1.7bn in FY21 compared to Rs 1.1bn in FY20. PPE increased from Rs. 1.41Bn in FY20 to Rs. 2.35Bn in FY21, largely due to substantial additions in computers and leasehold improvements during the year.

Tax rate as per income statement is 16.25% and as per Cash Flow statement is 16.17% for FY21. Tax expense on P&L was Rs. 701.57Mn whereas cash tax was Rs. 698.09Mn.

Other Observations:

During FY21, FSL recorded an exceptional item of Rs 1.15Bn. The company through its subsidiary (Sourcepoint – formerly ISGN), had a strategic partnership agreement with a leading mortgages business group to become a preferred vendor for business process management services. As per agreement, leading mortgages business group had options to get equity stake in Sourcepoint in lieu of higher volume thresholds. This has significantly increased the fair value of the liability of the option due to increase in the valuation of Sourcepoint. Leading mortgages business group has negotiated for an early exercise of its entitlement resulting in exceptional charge of Rs 1.15Bn during FY21.

PatientMatters provides Patient Advocacy services and Front-end RCM SaaS platform to address the Patient Responsibility and Self-Pay segment. It has strong presence in Texas, Arkansas, Montana and New York.


During FY21, FSL granted 16,569,000 (10,784,204 in FY20) employee stock options at an exercise price of Rs. 10 per share.

Major change in subsdiariers’s share in P&L:

Firstsource Group USA, Inc reduced its losses to Rs. 321Mn in FY21 from Rs. 608Mn in FY20.

Profit from MedAssist Holding LLC declined to Rs. 1,071Mn in FY21 from Rs. 1,784Mn in FY20.

Sourcepoint Inc reported losses of Rs. 1,341.10Mn compared to loss of Rs. 102.96 during FY20.


Story in chart

Revenue grew 7% QoQ led by … … Continued Traction in BFSI Vertical

Source: DART, Company Source: DART, Company

Top Client Recovery continues … .. and Client Addition (11) traction remains strong


OPM improved 80bps QoQ to 12.4% Strong Hiring traction continues


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Profit and Loss Account

(Rs Mn) FY20A FY21A FY22E FY23E

Revenue 40,986 50,780 61,534 68,580

Total Expense 34,697 42,790 51,470 57,185

COGS 27,735 34,672 41,900 46,489

Employees Cost 0 0 0 0

Other expenses 6,962 8,117 9,570 10,696

EBIDTA 6,289 7,990 10,063 11,394

Depreciation 1,852 2,064 2,494 2,845

EBIT 4,437 5,927 7,569 8,549

Interest 545 522 463 341

Other Income 50 13 145 250

Exc. / E.O. items 0 (1,151) 0 0

EBT 3,942 4,267 7,251 8,458

Tax 545 702 1,305 1,568

RPAT 3,397 3,565 5,946 6,890

Minority Interest 0 0 0 0

Profit/Loss share of associates 0 0 0 0

APAT 3,397 4,716 5,946 6,890

Balance Sheet


Sources of Funds

Equity Capital 6,938 6,961 6,961 6,961

Minority Interest 6 5 5 5

Reserves & Surplus 20,716 21,032 23,500 26,217

Net Worth 27,654 27,993 30,461 33,178

Total Debt 8,369 5,213 5,013 4,813

Net Deferred Tax Liability (1,776) (2,222) (2,231) (2,231)

Total Capital Employed 34,252 30,989 33,248 35,765

Applications of Funds

Net Block 28,709 29,976 29,156 28,211

CWIP 0 0 0 0

Investments 122 117 117 117

Current Assets, Loans & Advances 14,528 15,512 17,740 21,656

Inventories 0 0 0 0

Receivables 5,567 5,767 7,081 8,079

Cash and Bank Balances 1,907 1,373 1,897 4,145

Loans and Advances 0 0 0 0

Other Current Assets 7,054 7,546 8,437 9,106

Less: Current Liabilities & Provisions 9,107 14,616 13,766 14,220

Payables 953 2,788 1,551 1,567

Other Current Liabilities 8,154 11,828 12,214 12,653

sub total

Net Current Assets 5,422 896 3,975 7,436

Total Assets 34,252 30,989 33,248 35,765

E – Estimates


Important Ratios

Particulars FY20A FY21A FY22E FY23E

(A) Margins (%)

Gross Profit Margin 32.3 31.7 31.9 32.2

EBIDTA Margin 15.3 15.7 16.4 16.6

EBIT Margin 10.8 11.7 12.3 12.5

Tax rate 13.8 16.4 18.0 18.5

Net Profit Margin 8.3 7.0 9.7 10.0

(B) As Percentage of Net Sales (%)

COGS 67.7 68.3 68.1 67.8

Employee 0.0 0.0 0.0 0.0

Other 17.0 16.0 15.6 15.6

(C) Measure of Financial Status

Gross Debt / Equity 0.3 0.2 0.2 0.1

Interest Coverage 8.1 11.3 16.4 25.0

Inventory days 0 0 0 0

Debtors days 50 41 42 43

Average Cost of Debt 7.9 7.7 9.0 7.0

Payable days 8 20 9 8

Working Capital days 48 6 24 40

FA T/O 1.4 1.7 2.1 2.4

(D) Measures of Investment

AEPS (Rs) 4.9 6.8 8.5 9.9

CEPS (Rs) 7.6 9.7 12.1 14.0

DPS (Rs) 3.0 3.0 5.0 6.0

Dividend Payout (%) 61.5 44.2 58.5 60.6

BVPS (Rs) 39.9 40.2 43.8 47.7

RoANW (%) 12.4 12.8 20.3 21.7

RoACE (%) 12.1 16.1 20.0 21.0

RoAIC (%) 14.2 19.1 24.8 27.2

(E) Valuation Ratios

CMP (Rs) 205 205 205 205

P/E 41.9 30.3 24.0 20.7

Mcap (Rs Mn) 142,797 142,797 142,797 142,797

MCap/ Sales 3.5 2.8 2.3 2.1

EV 149,259 145,811 145,587 143,139

EV/Sales 3.6 2.9 2.4 2.1

EV/EBITDA 23.7 18.2 14.5 12.6

P/BV 5.2 5.1 4.7 4.3

Dividend Yield (%) 1.5 1.5 2.4 2.9

(F) Growth Rate (%)

Revenue 7.1 23.9 21.2 11.5

EBITDA 17.5 27.1 25.9 13.2

EBIT (3.8) 33.6 27.7 13.0

PBT (9.6) 8.2 70.0 16.6

APAT (10.1) 38.8 26.1 15.9

EPS (10.4) 38.5 26.1 15.9

Cash Flow


CFO 4,104 9,756 5,839 8,862

CFI 143 (3,496) (1,638) (2,241)

CFF (2,768) (6,887) (3,678) (4,373)

FCFF 2,972 8,060 4,164 6,962

Opening Cash 474 1,907 1,373 1,897

Closing Cash 1,907 1,373 1,897 4,145

E – Estimates

DART RATING MATRIX

Total Return Expectation (12 Months)

Buy > 20%

Accumulate 10 to 20%

Reduce 0 to 10%

Sell < 0%

Rating and Target Price History

Month Rating TP (Rs.) Price (Rs.)

Aug-20 Buy 85 54

Aug-20 Buy 85 65

Oct-20 BUY 100 71

Feb-21 BUY 150 98

Feb-21 BUY 150 97

May-21 Buy 150 123

*Price as on recommendation date

DART Team

Purvag Shah Managing Director [email protected] +9122 4096 9747

Amit Khurana, CFA Head of Equities [email protected] +9122 4096 9745

CONTACT DETAILS

Equity Sales Designation E-mail Direct Lines

Dinesh Bajaj VP - Equity Sales [email protected] +9122 4096 9709

Kapil Yadav VP - Equity Sales [email protected] +9122 4096 9735

Jubbin Shah VP - Equity Sales [email protected] +9122 4096 9779

Yomika Agarwal VP - Equity Sales [email protected] +9122 4096 9772

Anjana Jhaveri VP - FII Sales [email protected] +9122 4096 9758

Lekha Nahar AVP - Equity Sales [email protected] +9122 4096 9740

Equity Trading Designation E-mail

P. Sridhar SVP and Head of Sales Trading [email protected] +9122 4096 9728

Chandrakant Ware VP - Sales Trading [email protected] +9122 4096 9707

Shirish Thakkar VP - Head Domestic Derivatives Sales Trading [email protected] +9122 4096 9702

Kartik Mehta Asia Head Derivatives [email protected] +9122 4096 9715

Dinesh Mehta Co - Head Asia Derivatives [email protected] +9122 4096 9765

Bhavin Mehta VP - Derivatives Strategist [email protected] +9122 4096 9705

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(Rs) FSOL Target Price

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II. Disclaimer: This research report has been prepared by Dolat Capital Market Private Limited. to provide information about the company(ies) and sector(s), if any, covered in the report and may be distributed by it and/or its affiliated company(ies) solely for the purpose of information of the select recipient of this report. This report and/or any part thereof, may not be duplicated in any form and/or reproduced or redistributed without the prior written consent of Dolat Capital Market Private Limited. This report has been prepared independent of the companies covered herein. Dolat Capital Market Private Limited. and its affiliated companies are part of a multi-service, integrated investment banking, brokerage and financing group. Dolat Capital Market Private Limited. and/or its affiliated company(ies) might have provided or may provide services in respect of managing offerings of securities, corporate finance, investment banking, mergers & acquisitions, financing or any other advisory services to the company(ies) covered herein. Dolat Capital Market Private Limited. and/or its affiliated company(ies) might have received or may receive compensation from the company(ies) mentioned in this report for rendering any of the above services. Research analysts and sales persons of Dolat Capital Market Private Limited. may provide important inputs to its affiliated company(ies) associated with it. While reasonable care has been taken in the preparation of this report, it does not purport to be a complete description of the securities, markets or developments referred to herein, and Dolat Capital Market Private Limited. does not warrant its accuracy or completeness. Dolat Capital Market Private Limited. may not be in any way responsible for any loss or damage that may arise to any person from any inadvertent error in the information contained in this report. This report is provided for information only and is not an investment advice and must not alone be taken as the basis for an investment decision. The investment discussed or views expressed herein may not be suitable for all investors. The user assumes the entire risk of any use made of this information. The information contained herein may be changed without notice and Dolat Capital Market Private Limited. reserves the right to make modifications and alterations to this statement as they may deem fit from time to time. Dolat Capital Market Private Limited. and its affiliated company(ies), their directors and employees may; (a) from time to time, have a long or short position in, and buy or sell the securities of the company(ies) mentioned herein or (b) be engaged in any other transaction involving such securities and earn brokerage or other compensation or act as a market maker in the financial instruments of the company(ies) discussed herein or act as an advisor or lender/borrower to such company(ies) or may have any other potential conflict of interests with respect to any recommendation and other related information and opinions. This report is neither an offer nor solicitation of an offer to buy and/or sell any securities mentioned herein and/or not an official confirmation of any transaction. This report is not directed or intended for distribution to, or use by any person or entity who is a citizen or resident of or located in any locality, state, country or other jurisdiction, where such distribution, publication, availability or use would be contrary to law, regulation or which would subject Dolat Capital Market Private Limited. and/or its affiliated company(ies) to any registration or licensing requirement within such jurisdiction. The securities described herein may or may not be eligible for sale in all jurisdictions or to a certain category of investors. Persons in whose possession this report may come, are required to inform themselves of and to observe such restrictions.

For U.S. Entity/ persons only: “This Report is considered independent third-party research and was prepared by Dolat Capital Market Private Limited, with headquarters in India. The distribution of this Research is provided pursuant to the exemption under Rule 15a-6(a) (2) and is only intended for an audience of Major U.S. Institutional Investors (MUSIIs) as defined by Rule 15a-6(b)(4). This research is not a product of StoneX Financial Inc. Dolat Capital Market Private Limited has sole control over the contents of this research report. StoneX Financial Inc. does not exercise any control over the contents of, or the views expressed in, any research reports prepared by Dolat Capital Market Private Limited and under Rule 15a-6(a) (3), any U.S. recipient of this research report wishing to affect any transaction to buy or sell securities or related financial instruments based on the information provided in this research report should do so only through StoneX Financial Inc. Please contact Paul Karrlsson-Willis at +1 (407) 741-5310 or email [email protected] and/or Igor Chernomorskiy at +1 (212)379-5463 or email [email protected]. Under no circumstances should any U.S. recipient of this research report effect any transaction to buy or sell securities or related financial instruments through the Dolat Capital Market Private Limited.”

Dolat Capital Market Private Limited.

Corporate Identity Number: U65990DD1993PTC009797 Member: BSE Limited and National Stock Exchange of India Limited.

SEBI Registration No: BSE - INZ000274132, NSE - INZ000274132, Research: INH000000685 Registered office: Unit no PO6-02A - PO6-02D, Tower A, WTC, Block 51, Zone-5, Road 5E, Gift City, Gandhinagar, Gujarat – 382355

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Firstsource Solutions 330

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