Firstsource Solutions Ltd. — Investor Presentation 2020

May 27, 2020

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27[th] May 2020

To:

National Stock Exchange of BSE Limited (Scrip Code: India Limited (Scrip Code: FSL) 532809) Exchange Plaza, Phiroze Jeejeebhoy Towers, Plot no. C/1, G Block, Dalal Street, Bandra-Kurla Complex Mumbai - 400 001 Bandra (East), Mumbai - 400 051

Dear Madam/ Sir,

Sub: Post intimation of Analyst/ Institutional Investor Call

Pursuant to Regulation 30(6) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015, we are enclosing herewith a copy of the presentation regarding conference call held with the analysts and investors, on the financial results of the Company for the quarter and financial year ended 31[st] March 2020.

This is for your information and record.

Thanking you,

For Firstsource Solutions Limited

POOJA Digitally signed by POOJA SURESH SURESH NAMBIAR Date: 2020.05.27 NAMBIAR 12:31:44 +05'30'

Pooja Nambiar Company Secretary & Compliance Officer Encl.: A/a

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Firstsource Solutions Limited Q4 and FY2020 Earnings Update

Disclaimer

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Certain statements in this our future are presentation concerning growth prospects forward-looking statements, which involve a number of risks, and uncertainties that could cause actual results to differ materially from those in such forward-looking statements. The risks and uncertainties relating to these statements include, but are not limited to risks and uncertainties regarding fluctuations in earnings, our ability to manage growth, intense competition in BPO services including those factors which may affect our cost advantage, wage increases, our ability to attract and retain highly skilled professional, time and cost overruns on client contracts, client concentration, our ability to manage ramp-ups and growth, our ability to manage our international operations, reduced demand in our key focus verticals, disruptions in telecom infrastructure and technology, our ability to successfully complete and integrate potential acquisitions, liability for damages on our service contracts, performance of our subsidiaries, withdrawal of government fiscal incentives, political instability, legal restrictions on raising capital and acquiring companies outside India, unauthorized use of our intellectual property and general economic conditions affecting our industry. Firstsource may, from time to time, make additional written and oral forward-looking statements, including our reports to shareholders. The company does not undertake to update any forward-looking statements that may be made from time to time by or on behalf of the company.

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© Firstsource Solutions Limited | Confidential | 26 May 2020

Q4 FY2020 Executive Summary

Revenues

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₹ 10,804 Million
QoQ growth of 2.6% (CC 0.6%)
YoY growth of 11.7% (CC 8.2%)
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Profit After Tax

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₹ 916 Million (Margin 8.5%)
QoQ Margin flat
YoY Margin contraction 170 bps
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Operating Margin

₹ 1,168 Million (Margin 10.8%)

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QoQ Margin contraction of 40 bps YoY Margin contraction of 150 bps

Earnings Per Share (Diluted)

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₹ 1.31 per share Q3FY’20 at ₹ 1.29 per share Q4FY’19 at ₹ 1.42 per share

Note: Operating Margin implies EBIT (Earnings Before Interest and Taxes)

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© Firstsource Solutions Limited | Confidential | 26 May 2020

FY2020 Executive Summary

Revenues

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₹ 40,986 Million
YoY growth of 7.1% (CC 6.6%)
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Profit After Tax

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₹ 3,397 Million (Margin 8.3%) YoY Margin contraction 160 bps

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Operating Margin

₹ 4,437 Million (Margin 10.8%)

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YoY Margin contraction of 120 bps

Earnings Per Share (Diluted) ₹ 4.89 per share FY’19 at ₹ 5.45 per share

Note: Operating Margin implies EBIT (Earnings Before Interest and Taxes)

© Firstsource Solutions Limited | Confidential | 26 May 2020

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Other Highlights

Employee and Attrition Details

Headcount:

• 21,203 employees as on March 31, 2020

• 11,450 employees in India

• 9,753 employees based outside India

• Net addition of 721 employees in Q4 FY20

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Foreign Exchange Hedges

Outstanding FX hedges at $40.6 million for USD and £75.2 million for GBP

• Next 12 months: 48% coverage for USD at INR 76.25 levels, 100% coverage for GBP at INR 102.28 levels, and 32% coverage for GBP at PHP 67.73 levels

• Next 13 – 24 months: 85% coverage for GBP at INR 104.92 levels

• Post 24 Months: 88% coverage for GBP at INR 117.25 levels

Attrition Details:

• Onshore (US and Europe) – 42% compared to 46% in Q3 FY20

• Offshore (India and Philippines) – 34% compared to 36% in Q3 FY20

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© Firstsource Solutions Limited | Confidential | 26 May 2020

Q4 FY20 Revenue Snapshot (1/2)

Revenue by Segments

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9.7%
19.0% 19.0%
10.4%
10.5% 11.2%
33.4%
32.4% 31.3%
46.5%
38.1% 38.5%
Q4 FY2019 Q3 FY2020 Q4 FY2020
Customer Management Healthcare Collections Mortgage
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Revenue by Verticals

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2.4% 2.3%
2.0%
33.3% 32.3% 31.2%
22.0% 23.0%
27.5%
43.7% 43.5%
36.8%
Q4 FY2019 Q3 FY2020 Q4 FY2020
BFSI Telecom & Media Healthcare Others
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© Firstsource Solutions Limited | Confidential | 26 May 2020

Q4 FY20 Revenue Snapshot (2/2)

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	Revenue by Geography			Revenue by Delivery			Client Concentration
	55.3% 63.3% 63.2% 43.6% 35.3% 35.3% 1.1% 1.4% 1.5% Q4 FY2019 Q3 FY2020 Q4 FY2020 USA UK India & RoW			18.5% 25.2% 25.6% 81.5% 74.8% 74.4% Q4 FY2019 Q3 FY2020 Q4 FY2020 Offshore Onshore
	55.3% 63.3% 63.2% 43.6% 35.3% 35.3% 1.1% 1.4% 1.5% Q4 FY2019 Q3 FY2020 Q4 FY2020 USA UK India & RoW			18.5% 25.2% 25.6% 81.5% 74.8% 74.4% Q4 FY2019 Q3 FY2020 Q4 FY2020 Offshore Onshore			24.6% 19.5% 20.3% 42.3% 42.1% 42.2% Q4 FY2019 Q3 FY2020 Q4 FY2020 Top customer Top 5 customers

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© Firstsource Solutions Limited | Confidential | 26 May 2020

FY20 Revenue Snapshot (1/2)

Revenue by Segments

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8.8%
16.2%
9.3%
10.9%
34.6%
32.9%
47.3%
40.0%
FY2019 FY2020
Customer Management Healthcare Collections Mortgage
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Revenue by Verticals

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1.7% 2.4%
34.3% 32.7%
23.6%
28.0%
41.3%
36.0%
FY2019 FY2020
BFSI Telecom & Media Healthcare Others
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© Firstsource Solutions Limited | Confidential | 26 May 2020

FY20 Revenue Snapshot (2/2)

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Revenue by Geography Revenue by Delivery Client Concentration
1.1% 1.4%
41.4% 41.1%
37.2%
43.9%
80.4%
75.9%
24.5%
21.1%
61.4%
55.0%
24.1%
19.6%
FY2019 FY2020 FY2019 FY2020 FY2019 FY2020
USA UK India & RoW Offshore Onshore Top customer Top 5 customers
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© Firstsource Solutions Limited | Confidential | 26 May 2020

Business Outlook

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• Heighted uncertainties in the macro and business environment due to COVID19. Suspending our Annual guidance practice temporarily; hope to resume as the boundaries get defined

• Directionally, given inherent advantage of our industry portfolio mix, business momentum expected to remain strong barring the short term volatility

• Sales pipeline is solid

• Immediate focus on short haul opportunities in BFS and HC Payer arising from demand-supply capacity mismatch

• Large deals are witnessing some delays in decision making and/ or mobilization

• We are geared up for running a lean marathon for FY21…

• Flex our capacity and costs to align with demand curve

• Majority of our Operations can now switch seamlessly between office and WAH

• Continued Digitization of our Sales – Execution – Transformation value chain for operating a Distributed operations robustly

• …While we continue to invest for strong growth forays in our target areas

• Digital services, including Next Generation Customer Experience

• Head of Healthcare Payer (Venkatgiri Vandali), Head of CMT (Anshul Verma) and Head of Next Gen CX (Ashish Bisaria) on board

• Sales and Solutions teams augmentation progressing nicely

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© Firstsource Solutions Limited | Confidential | 26 May 2020

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Helping customers stay ahead of the curve through transformational technologies and capabilities

Firstsource is a leading provider of customised Business Process Management (BPM) services. We specialise in helping customers stay ahead of the curve through transformational solutions in order to reimagine business processes and deliver increased efficiency, deeper insights and superior outcomes.

We are trusted brand custodians and long-term partners to 100+ leading brands with presence in the US, UK, Philippines and India.

Our ‘rightshore’ delivery model offers solutions covering complete customer lifecycle across Healthcare, Telecommunications & Media and Banking, Financial Services & Insurance verticals.

www.firstsource.com

Financial Performance Q4 and FY2020

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In ₹ million	Q4 FY 2020	Q3 FY 2020	Q4 FY 2019		In ₹ million	FY 2020	FY 2019
Income from services	10,673	10,446	9,642		Income from services	40,502	37,867
Other operating Income	132	89	30		Other operating Income	484	396
Revenue from operations	10,804	10,535	9,672		Revenue from operations	40,986	38,263
Personnel and Operating Expense	9,163	8,868	8,288		Personnel and Operating Expense	34,697	32,908
Operating EBITDA	1,641	1,666	1,384		Operating EBITDA	6,289	5,355
Operating EBITDA %	15.2%	15.8%	14.3%		Operating EBITDA %	15.3%	14.0%
Depreciation / amortization	474	484	190		Depreciation / amortization	1852	744
Operating Margin	1,168	1,182	1,195		Operating Margin	4,437	4,610
Operating Margin %	10.8%	11.2%	12.4%		Operating Margin %	10.8%	12.0%
Other Income / (expense)	(16)	2	(25)		Other Income / (expense)	17	(26)
Interest Income / (expense), net	(121)	(148)	(57)		Interest Income / (expense), net	(512)	(225)
PBT	1,031	1,036	1,112		PBT	3,942	4,359
PBT (% of total income)	9.5%	9.8%	11.5%		PBT (% of total income)	9.6%	11.4%
Taxes and Minority Interest	115	140	130		Taxes and Minority Interest	545	581
PAT	916	895	982		PAT	3,397	3,778
PAT (% of total income)	8.5%	8.5%	10.2%		PAT (% of total income)	8.3%	9.9%

Note: Operating Margin implies EBIT (Earnings Before Interest and Taxes)

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© Firstsource Solutions Limited | Confidential | 26 May 2020