eClerx Services

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%.

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.

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.

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.

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.

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%.

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.