ECLERX - eClerx Services

📊 NSE: ECLERX 🏢 Computers - Software - Medium / Small 📅 Last Updated: 12/13/2025 21:43

💰 Financial Performance

Revenue Growth by Segment

Total revenue for Q2 FY26 grew 22.6% YoY to INR 1,035.2 Cr. Operating revenue grew 20.8% YoY to INR 1,004.9 Cr. The BFSI (Financial Markets) segment showed strong momentum, while the Emerging segment grew significantly due to a mix of new client additions and expansion in existing accounts, though it remains a small absolute contributor.

Geographic Revenue Split

The company has a global delivery footprint across 15+ countries including India, USA, UK, Philippines, and Germany. Revenue is highly concentrated in international markets, with 86% of revenue earned in US Dollars, 9% in Euros, and 5% in Sterling and other currencies.

Profitability Margins

EBIT margin for Q2 FY26 was 27%, significantly higher than peers. Profit After Tax (PAT) for the quarter was INR 183.2 Cr, representing a 30.6% YoY increase. The company maintains a long-term EBIT margin guidance range of 24% to 28%.

EBITDA Margin

EBIT for the period was INR 255.8 Cr, up 30.5% YoY. The 27% EBIT margin was aided by a 200 basis point tailwind from currency depreciation in Q2 FY26, though management expects some normalization in subsequent quarters.

Capital Expenditure

Not explicitly disclosed in absolute INR Cr for future periods, but management highlighted ongoing investments in opening new delivery centers and hiring ahead of the demand curve to support growth.

⚙️ Operational Drivers

Raw Materials

Human Capital (Personnel) is the primary cost driver, representing the vast majority of operational expenses. Employee costs increased from INR 230.66 Cr in the previous year due to headcount expansion and retention plans.

Import Sources

Not applicable (Service-based industry).

Key Suppliers

Not applicable for core operations, though the company engages professional services firms like Ernst & Young for investor relations and Price Waterhouse Chartered Accountants LLP for statutory auditing.

Capacity Expansion

Current delivery headcount stands at 21,293 as of September 2025, an 18% YoY increase. The company is actively hiring ahead of the demand curve and opening new centers to expand capacity.

Raw Material Costs

Personnel costs are the primary expense. Trade payables increased to INR 78.57 Cr from INR 75.54 Cr YoY, primarily due to increased scale of operations.

Manufacturing Efficiency

Capacity utilization rate is currently at 75%, which is below the industry benchmark of 80% to 85%, suggesting significant room for margin expansion as utilization improves.

Logistics & Distribution

Not applicable.

📈 Strategic Growth

Expected Growth Rate

22.60%

Growth Strategy

Growth is driven by the 'One eClerx' initiative, which unifies the organization to enhance cross-selling and upselling of diverse service lines. The strategy involves investing in client-facing teams, integrating pre-sales and solutioning functions across verticals to secure larger deals, and expanding delivery centers globally.

Products & Services

Business process management, automation, analytics, intelligent operations, insights, and data-driven process solutions for Fortune 2000 enterprises.

Brand Portfolio

eClerx, One eClerx.

New Products/Services

Implementation of AI-driven quality assessments for customer-agent interactions and the expansion of BPaaS (Business Process as a Service) offerings using proprietary IP and low-code/no-code technology.

Market Expansion

Expanding delivery centers in 15+ countries including Egypt, Philippines, and India, and targeting new client segments within the BFSI and Emerging verticals.

Market Share & Ranking

Recognized as a 'major contender' in three key service offerings by industry analysts; aims to be in the top quartile of the segment for growth.

Strategic Alliances

Increased engagement with industry analysts and advisors, resulting in being recognized as a 'major contender' in three key service offerings.

🌍 External Factors

Industry Trends

The Indian technology sector grew 5.1% in FY25 to $282.6 billion. The industry is shifting toward AI-driven transformations and intelligent operations, with eClerx positioning itself as a specialist in complex data-driven processes.

Competitive Landscape

Operates in a highly competitive BPM and analytics market; recognized as a 'major contender' against larger domestic and international service providers.

Competitive Moat

Durable advantages include deep domain expertise in BFSI and specialized data analytics, reflected in a 27% EBIT margin that exceeds industry norms. The 'One eClerx' strategy creates high switching costs through integrated service delivery.

Macro Economic Sensitivity

Highly sensitive to currency fluctuations and global economic conditions, particularly in the US and Europe, given that 95% of revenue is derived from USD and Euro-denominated markets.

Consumer Behavior

Enterprise clients are increasingly seeking 'intelligent operations' and measurable improvements in customer experience rather than simple cost-arbitrage outsourcing.

Geopolitical Risks

Operations across 15+ countries expose the company to diverse regulatory and economic conditions, including potential trade barriers or regional instability in delivery hubs like Egypt or the Philippines.

⚖️ Regulatory & Governance

Industry Regulations

Operations are subject to data privacy laws (like GDPR), labor regulations across 15+ countries, and industry-specific compliance standards for BFSI clients.

Environmental Compliance

Not disclosed.

Taxation Policy Impact

Not disclosed as a specific percentage.

⚠️ Risk Analysis

Key Uncertainties

Cyber security incidents could cause major service disruption. Currency volatility is a constant risk given the 86% USD revenue exposure. Client concentration (63% from top 10) poses a risk if outsourcing strategies change due to M&A among clients.