Firstsource SolutionsNSE:FSL -0.23%81 Gross Margin % is 43.49% as of Mar. 2026, which is 25% above its 10-year median of 34.87. GuruFocus rates NSE:FSL with a GF Score™ of 81/100 and a GF Value™ of ₹370.94 (Significantly Undervalued). The stock has 1 warning sign investors should review. Among 2,685 Software companies, Firstsource Solutions ranks better than 51.69% on this metric.
Warren Buffett believes that firms with excellent long term economics tend to have consistently higher margins.
Durable competitive advantage creates a high Gross Margin % because of the freedom to price in excess of cost. Companies can be categorized by their Gross Margin %
1. Greater than 40% = Durable competitive advantage
2. Less than 40% = Competition eroding margins
3. Less than 20% = no sustainable competitive advantage
Consistency of Gross Margin is key
Firstsource Solutions had a gross margin of 43.49% for the quarter that ended in Mar. 2026 => Durable competitive advantage
Be Aware
If a company loses its competitive advantages, usually its gross margin declines well before its sales declines. Watching Gross Margin % and Operating Margin % closely helps avoid value trap situations.
Firstsource Solutions Gross Margin % Related Terms
Firstsource Solutions Gross Margin % Historical Data
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The historical data trend for Firstsource Solutions's Gross Margin % can be seen below:
* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD. * For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.
NSE:FSL vs IBM, ACN, FISV: Gross Margin % Comparison
For the Information Technology Services subindustry, Firstsource Solutions's Gross Margin %, along with its competitors' market caps and Gross Margin % data, can be viewed below:
* Competitive companies are chosen from companies within the same industry, with headquarter located in same country, with closest market capitalization; x-axis shows the market cap, and y-axis shows the term value; the bigger the dot, the larger the market cap. Note that "N/A" values will not show up in the chart.
Firstsource Solutions Gross Margin % vs Software Industry
For the Software industry and Technology sector, Firstsource Solutions's Gross Margin % distribution charts can be found below:
* The bar in red indicates where Firstsource Solutions's Gross Margin % falls into.
* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD. * For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.
A positive Gross Profit is only the first step for a company to make a net profit. The gross profit needs to be big enough to also cover related labor, equipment, rental, marketing/advertising, research and development and a lot of other costs in selling the products.
Firstsource Solutions (NSE:FSL) has a Gross Margin % of 43.49% as of Mar. 2026. Gross margin is the ratio of total gross profit to net sales. View historical data on Firstsource Solutions and its competitors. This is 25% above median its historical median of 34.87. Over the past decade, Firstsource Solutions' Gross Margin % has ranged from 29.55 to 41.87. According to the industry distribution chart, Firstsource Solutions ranks #1297 out of 2685 companies in the Software industry, placing it in the top 48.3%.
Is Firstsource Solutions' Gross Margin % too high?
Firstsource Solutions' current Gross Margin % of 43.49% is 25% above median its 10-year median of 34.87. Over the past 10 years, this metric has ranged from a low of 29.55 to a high of 41.87. The Software industry median Gross Margin % is 40.45. Firstsource Solutions' value of 43.49% is 7.5% above this industry median. Based on the distribution chart, Firstsource Solutions ranks #1297 out of 2685 companies in the Software industry, which is above the industry midpoint. Overall, Firstsource Solutions has a GF Score™ of 81/100 and is considered Significantly Undervalued, reflecting its overall financial health beyond just this single metric.
How does Firstsource Solutions' Gross Margin % compare to IBM and ACN?
According to the Software industry distribution chart, Firstsource Solutions ranks #1297 out of 2685 companies for Gross Margin %. This puts Firstsource Solutions in the upper half of its industry. The industry median Gross Margin % is 40.45. Firstsource Solutions' value of 43.49% is 7.5% above this benchmark. Historically, Firstsource Solutions' own Gross Margin % has ranged from 29.55 to 41.87 over the past decade. While the company's 10-year median is 34.87 vs. the industry median of 40.45, Firstsource Solutions has consistently been above the industry average. See the competitive comparison table and distribution chart on this page for a detailed peer-by-peer breakdown.
What is a good Gross Margin % for a Software company?
The median Gross Margin % among Software companies is 40.45, based on 2,685 companies in the industry. Companies in the top quartile (top 25%) have a Gross Margin % significantly above this median, while those in the bottom quartile fall well below. However, Gross Margin % should not be evaluated in isolation — investors should consider it alongside profitability, growth, and financial strength metrics. Firstsource Solutions's current Gross Margin % of 43.49% is 7.5% above the industry median. Use the industry distribution chart on this page to see where any company falls relative to its peers.
What does a high Gross Margin % mean?
A high Gross Margin % can signal that a stock is expensive relative to its fundamentals. Gross margin is the ratio of total gross profit to net sales. View historical data on Firstsource Solutions and its competitors. For the Software industry, the median Gross Margin % is 40.45 — values significantly above this may indicate overvaluation, while values below may suggest a bargain or underlying issues. Firstsource Solutions's current Gross Margin % is 43.49%, which is 25% above median its own 10-year median of 34.87. However, context matters — high-growth companies often justify higher valuations. Always evaluate alongside other metrics like GF Score™ and GF Value™.
Is Firstsource Solutions stock overvalued right now?
Based on GuruFocus' analysis, Firstsource Solutions (NSE:FSL) is currently considered Significantly Undervalued. The stock's GF Value™ is ₹370.94, compared to a current price of ₹243.45 — trading 34.4% below its estimated fair value. The current Gross Margin % is 43.49%, which is 25% above median its 10-year median of 34.87 and 7.5% above the Software industry median of 40.45. Firstsource Solutions' overall GF Score™ is 81/100 with 1 warning sign to review. Investors should evaluate multiple metrics — including profitability, growth, and financial strength — before making a decision.
How is Gross Margin % calculated?
Gross Margin % is calculated from a company's financial statements. For Firstsource Solutions (NSE:FSL), the current Gross Margin % is 43.49% as of Mar. 2026. GuruFocus calculates this using data sourced from SEC filings and annual reports. See the calculation section and 30-year financial data on this page for the full breakdown.
Is Firstsource Solutions (NSE:FSL) Overvalued in 2026?
Based on GuruFocus' analysis, Firstsource Solutions stock appears to be undervalued.
The current stock price of ₹243.45 is trading 34.4% below its estimated GF Value™ of ₹370.94.
GuruFocus considers Firstsource Solutions to be Significantly Undervalued.
Key valuation signals for NSE:FSL:
Gross Margin %: 43.49% (25% above median its 10-year median of 34.87)
GF Value™: ₹370.94 vs. price of ₹243.45 (34.4% below fair value)
Industry Position: 7.5% above the Software median (#1297 of 2685)
No single metric tells the full story. See the NSE:FSL stock analysis page for a complete view including 30-year financials, guru trades, and insider activity.
Firstsource Solutions Ltd is engaged in the business of providing customer management services like contact centers, transaction processing, and debt collection services. The company's business segment includes Banking and Financial Services, Healthcare, Communication, Media and Technology, and Diverse Industries. It generates maximum revenue from the Banking and Financial Services segment. Geographically, it derives a majority of its revenue from the United States of America.
81GF Score
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