Firstsource SolutionsNSE:FSL +0.68%81 Operating Margin % is 12.03% as of Mar. 2026, which is 3% above its 10-year median of 11.64. GuruFocus rates NSE:FSL with a GF Score™ of 81/100 and a GF Value™ of ₹370.89 (Significantly Undervalued). The stock has 1 warning sign investors should review. Among 2,818 Software companies, Firstsource Solutions ranks better than 73.49% on this metric.
Just like Gross Margin %, it is important to see a company maintains its operating margin over time. Among the same industry, a company with higher operating margin is more efficient in its operation. It is also more stable during industry slowdown or recessions. Peter Lynch prefers those with higher margins than those with lower margins.
Be Aware
Operating Margin % can be manipulated by adjusting the rate of depreciation, depletion and amortization (DDA).
If a company is facing competition, its Operating Margin % may decline. Often the Operating Margin % declines well before the company's Revenue or even profit decline. Therefore, Operating Margin % is a very important indicator of whether the company is facing problems.
For instance, by 2012, Nokia (NOK)'s problems were well known and its stock had lost more than 90% of its market value since 2007. But Nokias Operating Margin % had already been in decline since 2002, although its Earnings per Share (Diluted) were still rising. Investors who paid attention to Operating Margin % would have avoided this huge loss. The same can be said for Research-in-Motion (RIMM).
Therefore, Operating Margin % is a very important screening filter for GuruFocus. GuruFocus's Buffett-Munger screener requires that the profit margin is either consistent or expanding. The Model Portfolio of the Buffett-Munger screener has outperformed the market every year since inception in 2009.
Firstsource Solutions Operating Margin % Related Terms
Firstsource Solutions Operating Margin % Historical Data
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The historical data trend for Firstsource Solutions's Operating 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: Operating Margin % Comparison
For the Information Technology Services subindustry, Firstsource Solutions's Operating Margin %, along with its competitors' market caps and Operating 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 Operating Margin % vs Software Industry
For the Software industry and Technology sector, Firstsource Solutions's Operating Margin % distribution charts can be found below:
* The bar in red indicates where Firstsource Solutions's Operating Margin % falls into.
Operating Margin % - also known as operating income margin, operating profit margin and return on sales (ROS) - is the ratio of Operating Income divided by net sales or Revenue, usually presented in percent.
Firstsource Solutions's Operating Margin % for the fiscal year that ended in Mar. 2026 is calculated as
* 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.
Firstsource Solutions (NSE:FSL) has a Operating Margin % of 12.03% as of Mar. 2026. Operating margin is the ratio of total operating income to net sales. View historical data on Firstsource Solutions and its competitors. This is near median its historical median of 11.64. Over the past decade, Firstsource Solutions' Operating Margin % has ranged from 9.93 to 12.62. According to the industry distribution chart, Firstsource Solutions ranks #747 out of 2818 companies in the Software industry, placing it in the top 26.5%.
Is Firstsource Solutions' Operating Margin % too high?
Firstsource Solutions' current Operating Margin % of 12.03% is near median its 10-year median of 11.64. Over the past 10 years, this metric has ranged from a low of 9.93 to a high of 12.62. The Software industry median Operating Margin % is 3.87. Firstsource Solutions' value of 12.03% is 211.3% above this industry median. Based on the distribution chart, Firstsource Solutions ranks #747 out of 2818 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' Operating Margin % compare to IBM and ACN?
According to the Software industry distribution chart, Firstsource Solutions ranks #747 out of 2818 companies for Operating Margin %. This puts Firstsource Solutions in the upper half of its industry. The industry median Operating Margin % is 3.87. Firstsource Solutions' value of 12.03% is 211.3% above this benchmark. Historically, Firstsource Solutions' own Operating Margin % has ranged from 9.93 to 12.62 over the past decade. While the company's 10-year median is 11.64 vs. the industry median of 3.87, 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 Operating Margin % for a Software company?
The median Operating Margin % among Software companies is 3.87, based on 2,818 companies in the industry. Companies in the top quartile (top 25%) have a Operating Margin % significantly above this median, while those in the bottom quartile fall well below. However, Operating Margin % should not be evaluated in isolation — investors should consider it alongside profitability, growth, and financial strength metrics. Firstsource Solutions's current Operating Margin % of 12.03% is 211.3% 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 Operating Margin % mean?
A high Operating Margin % can signal that a stock is expensive relative to its fundamentals. Operating margin is the ratio of total operating income to net sales. View historical data on Firstsource Solutions and its competitors. For the Software industry, the median Operating Margin % is 3.87 — values significantly above this may indicate overvaluation, while values below may suggest a bargain or underlying issues. Firstsource Solutions's current Operating Margin % is 12.03%, which is near median its own 10-year median of 11.64. 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 ₹370.89, compared to a current price of ₹244.00 — trading 34.2% below its estimated fair value. The current Operating Margin % is 12.03%, which is near median its 10-year median of 11.64 and 211.3% above the Software industry median of 3.87. 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 Operating Margin % calculated?
Operating Margin % is calculated from a company's financial statements. For Firstsource Solutions (NSE:FSL), the current Operating Margin % is 12.03% 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 ₹244.00 is trading 34.2% below its estimated GF Value™ of ₹370.89.
GuruFocus considers Firstsource Solutions to be Significantly Undervalued.
Key valuation signals for NSE:FSL:
Operating Margin %: 12.03% (near median its 10-year median of 11.64)
GF Value™: ₹370.89 vs. price of ₹244.00 (34.2% below fair value)
Industry Position: 211.3% above the Software median (#747 of 2818)
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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