eClerx Services Limited — Q4 FY26 earnings call

Call held 14 May 2026

Management summary

eClerx Services delivered robust full-year FY26 results, with significant growth in operating revenue, EBITDA, and net profit, driven by strategic investments in analytics and AI. While Q4 FY26 saw softer sequential revenue growth and some vertical-specific softness, new deal wins remained strong. The company expressed confidence in achieving top-quartile growth and maintaining 24-28% EBITDA margins for FY27, despite acknowledging potential AI-led deflationary pressures and regulatory risks like the NPRM on offshore call restrictions.

Highlights

  • FY'26 operating revenue reached USD 469 million, marking a 17.9% year-on-year growth in dollar terms.

  • FY'26 EBITDA grew 29% to INR 1,153 crores, with margins expanding meaningfully.

  • Net profit for FY'26 rose 30% to INR 706 crores, and EPS increased 33% post bonus issue.

  • Q4 new deal wins totaled USD 46 million, reflecting steady momentum and client confidence.

  • Top 10 client concentration reduced to 59% from 63-64%, indicating healthy portfolio diversification.

Concerns

  • Q4 operating revenue showed modest 0.6% sequential growth.

  • BFSI, M&D, and retail verticals experienced a softer Q4.

  • Fashion and Luxury had a sluggish year in FY26.

  • Potential impact of the proposed NPRM on offshore call restrictions was highlighted as a challenge.

  • Management acknowledged that AI and the competitive landscape could lead to 'some deflationary pressures' on bookings.

Key financials

3 periods

Headline

  • Analytics & Automation Book
    90 Mn

Q4

  • Operating Revenue
    122 Mn
    YoY +17% QoQ +0.6%
  • Operating Revenue
    ₹1,135 Cr
    YoY +24% QoQ +3.1%
  • Operating EBITDA
    ₹284.1 Cr
    QoQ +2.8%
  • Operating EBITDA Margin
    25.7%
  • PAT
    ₹189.4 Cr
  • PAT Margin
    16.7%
  • Utilization
    74%
  • Attrition
    21%
  • Top 10 Client Concentration
    59%
  • New Deal Wins
    46 Mn

FY26

  • Operating Revenue
    469 Mn
    YoY +17.9%
  • Operating Revenue
    ₹4,217 Cr
    YoY +22%
  • EBITDA
    ₹1,153 Cr
    YoY +29%
  • Net Profit
    ₹706 Cr
    YoY +30%
  • EPS Growth
    33%
  • Cash from Operations
    8,729 Mn
  • Free Cash Flow
    7,560 Mn
    YoY +33%
  • OCF-to-EBITDA Ratio
    75%

What they filed

Q1 FY27: revenue up 23.2%, net profit up 15.5% against the same quarter last year.

₹ Cr · quarterly
Line itemQ2 FY25Q3 FY25Q4 FY25Q1 FY26Q2 FY26Q3 FY26Q4 FY26Q1 FY27
Revenue832 854 898 935 1,005 +21%1,070 +25%1,107 +23%1,152 +23%
EBITDA216 207 219 224 271 +25%276 +33%283 +29%265 +18%
Net profit140 137 153 142 183 +31%192 +40%190 +24%164 +15%
How to read this

₹ crore, as filed. The percentage beside a figure is the change against the same quarter a year earlier — never the quarter before, which would make every seasonal business look like it collapses and booms each year.

Capital allocation

high confidence
  • Capex Capex disclosed
    • Investments in computers and networking equipment
    CapEx is up in Q4. This is primarily due to investments in computers and networking equipment.
  • Dividend ₹1/share (final)
    The Board has proposed a dividend of INR 1 per share.

Guidance & targets

Revenue Growth

  • FY27 Growth Revenue Growth · FY27 · Medium confidence top quartile
    For FY '27 also, we are saying that we will be in the top quartile of the growth.

    — Kapil Jain

  • Q1 FY27 Sequential Growth Revenue Growth · Q1 FY27 · High confidence stronger than Q4
    our Q1 will be stronger sequentially than what Q4 has been over Q3.

    — Kapil Jain

Profitability

  • EBITDA Margin Profitability · FY27 · High confidence 24% to 28%
    on margin, yes, we would like to retain the same guidance between 24% to 28%.

    — Kapil Jain

Segment Growth

  • Tech and Analytics Growth Segment Growth · FY27/28 · Medium confidence grow faster than the company growth
    Tech and analytics are a focus area for us. So, we expect that it has to grow faster than the company growth, which has been the case this year, and we'll continue to aspire for that.

    — Kapil Jain

  • CLX Business Growth Segment Growth · H1 FY27 · Medium confidence return to growth
    Fashion and Luxury had a sluggish year, but our CLX business is expected to return to growth in H1 FY '27

    — Kapil Jain

What to watch in Q1 FY27

Q1 FY27 Sequential Revenue Growth

Q1 FY27
Current Q4 FY26 sequential growth 0.6%
Target Stronger than Q4 FY26

Why it matters

Management explicitly guided for a sequential rebound in Q1 FY27 after a soft Q4, indicating momentum.

our Q1 will be stronger sequentially than what Q4 has been over Q3.

Risks & concerns

  • NPRM on Offshore Call Restrictions

    high

    The proposed NPRM on offshore call restrictions could pose a challenge if it becomes law, potentially impacting the contact center business.

    Management acknowledged

  • Macroeconomic Headwinds

    medium

    Despite real macro headwinds, the company delivered strong numbers, but acknowledges the ongoing challenge.

    Management acknowledged

  • Geopolitical Uncertainty and Macroeconomic Pressure

    medium

    Geopolitical uncertainty and macroeconomic pressure remain part of the operating landscape, and the company is not immune to these dynamics.

    Management acknowledged

  • AI Deflationary Pressures on Bookings

    medium

    A combination of AI and the competitive landscape may put some deflationary pressures on contract values.

    Management acknowledged

  • Competitive Intensity

    medium

    The company operates in a competitive landscape, which is a factor in potential deflationary pressures.

    Management acknowledged

Q&A highlights

3 direct, 1 evasive
FY27 Growth Momentum vs FY26 Evasive
For FY '27 also, we are saying that we will be in the top quartile of the growth. In terms of whether it will be lower or higher, I think I wouldn't want to comment at this stage.

Analyst sought specific FY27 growth expectations, but management only reiterated qualitative 'top quartile' guidance without comparing it to FY26's strong performance.

Asked by Sandeep Shah

AI Deflationary Impact on Bookings Partial
Some of it maybe, Abhishek, I wouldn't say deflationary pressures because of AI, but the competitive landscape like I think that was to the previous question. So, a combination of that may put some deflationary pressures.

Management acknowledged that AI and the competitive landscape could introduce 'some deflationary pressures' on contract values, a key concern for the services sector.

Asked by Abhishek Bhandari

Agentic AI Project Commercial Structure Partial
See clients on Agentic AI because of the benefits, clients who are confident... in certain areas, yes, we are committing on the outcomes. ... For this Agentic AI deployment, that specific project that I called out, it is not linked to outcome or positive or negative influence.

Clarified that while some AI projects are outcome-based, the specific large Agentic AI win mentioned is not, indicating a mix of commercial models and varying client willingness to share outcomes.

Asked by Girish Pai

Impact of NPRM on Offshore Call Restrictions Direct
I think like this NPRM guidelines on the contact center... if that becomes a rule that telcos and cable companies can only outsource a certain percentage of work and certain percentage of work has to stay within the U.S. could pose a challenge.

Management identified a specific regulatory risk (NPRM) that could significantly impact their contact center business if enacted into law.

Asked by Varun Bang

Subcontractor Expenses Increase Direct
So, there is a reclassification of some expenses from business promotion into subcon in this quarter, which is for the full year, which is why that number is appearing high. But on a BAU basis, if we exclude that, then there is no meaningful change.

Management clarified that a reclassification caused a temporary increase in subcon expenses, indicating it's not a fundamental shift in operational cost structure.

Asked by Rohit Thorat

Capital Allocation Preference (Buybacks vs. Dividends) Direct
No. Buybacks will continue to remain the preferred option.

Confirmed the company's consistent capital allocation strategy, prioritizing buybacks over dividends, providing clarity for shareholders.

Asked by Varun Bang

3 min read 7 chapters

Detailed narrative

Overall Performance Q4 FY26 & Full Year FY26

eClerx Services delivered strong full-year FY26 results, with operating revenue reaching USD 469 million, marking a 17.9% year-on-year growth in dollar terms, and INR 4,217 crores, up 22% YoY. EBITDA grew 29% to INR 1,153 crores, and net profit rose 30% to INR 706 crores, leading to a 33% increase in EPS post bonus issue. For Q4 FY26, operating revenue was USD 122 million (up 17% YoY, 0.6% sequential growth) and INR 1,135 crores, with an operating EBITDA margin of 25.7% and PAT margin of 16.7%.

AI & Automation Initiatives

The company made substantial internal and client-facing progress in AI, securing its first large-scale Agentic AI win in Q4 FY26, with deployments planned for Q1 FY27. An Agentic data sourcing platform was launched, attracting strong interest from large banks, and an AI-native orchestrator for KYC case management is live across multiple client systems. Internally, over 3,000 employees were trained on Agentic AI, and the analytics and automation book reached a significant milestone of USD 90 million.

Vertical Performance & Outlook

CMT delivered an excellent Q4 with sequential growth exceeding 7%. While BFSI, M&D, and retail experienced a softer Q4, the pipeline remains strong. Fashion and Luxury had a sluggish year but is expected to return to growth in H1 FY27, supported by new GenAI wins. The emerging business, led by finance & accounting, delivered strong growth for three consecutive quarters. Management is cautiously optimistic across all verticals for FY27, with high-tech expected to see higher growth.

Margins & Operational Efficiency

The Q4 operating EBITDA margin stood at 25.7%, demonstrating discipline despite softer sequential revenue growth. Full-year EBITDA expanded by 132 bps. Utilization in Q4 was 74%, lower than the Q3 high of 76.5%. Attrition was 21%, marginally up compared to Q2 and Q3 but lower than past levels. The company aims to retain an EBITDA margin guidance between 24% to 28% for FY27.

Client & Portfolio Diversification

Top 10 client concentration decreased to 59% from 63-64%, indicating a healthy sign of portfolio diversification and reduced concentration risk as the company scales. New deal wins for Q4 were USD 46 million, reflecting steady momentum and strong client confidence. The company is actively exploring geographic diversification into Manila, Cairo, and Fayetteville, and strengthening client relationships across banking, retail, and M&D.

Capital Allocation Strategy

The Board has proposed a dividend of INR 1 per share. Management reiterated that buybacks will continue to remain the preferred capital allocation option. For FY26, the company generated INR 8,729 million of cash from operations and a free cash flow of INR 7,560 million, which was 33% and 41% higher than the previous year, with an OCF-to-EBITDA ratio of 75%.

Risks & Outlook

The company acknowledges ongoing geopolitical uncertainty and macroeconomic pressures. A key concern is the proposed NPRM on offshore call restrictions, which could pose a challenge if it becomes law, prompting active dialogue with clients on contingency planning. While AI and competitive landscape may introduce 'some deflationary pressures' on bookings, eClerx is confident in delivering top-quartile growth for FY27, with Q1 FY27 expected to be stronger sequentially than Q4 FY26.

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