eClerx Services532927Update
Q2FY27 call: USD revenue up 10.6% YoY, operating EBITDA margin 23.9%, full-year margin guided at 24-28%
Earnings call transcript for Q2FY27 is out.
By ScoutQuest · · 3 min read
The transcript covers the Q2FY27 earnings call held on October 29, 2026, including management's opening remarks and the start of the analyst question and answer session. Here are the main takeaways.
Revenue and profit
- Operating revenue was USD 127.7 million, up 10.6% year-on-year, up 12.9% in constant currency and up 1.5% sequentially. Management described this as the 13th consecutive quarter of sequential revenue expansion.
- INR operating revenue was INR 11,887 million, up 18% year-on-year, at an implied exchange rate of INR 93.1 for every dollar.
- Operating EBITDA was INR 2,839 million at a margin of 23.9%, up 90 basis points quarter-on-quarter.
- PAT was INR 1,804 million at a margin of 14.9%, up 9.8% quarter-on-quarter.
- Including other income of INR 240 million, total revenue was INR 12,126 million, up 3.6% sequentially.
Deal wins and demand
- New deal wins were USD 31 million, compared with USD 41 million in the previous quarter.
- First half deal wins were USD 72 million, compared with USD 78 million in the same period last year.
- Clients remain selective, with tighter budgets and longer decision cycles as spending shifts towards AI-related investments.
- Management said clients are starting with smaller deal values to test AI before committing to larger programmes, and that contract terms are not materially different from before.
Business mix
- Analytics and automation grew 5% sequentially and 27% year-on-year, with an annual revenue run rate of about USD 109 million and roughly 20% of revenue.
- Emerging business is 12.6% of revenue, up from 11.7%.
- BFSI grew about 3% sequentially on short-term engagements, while easing US financial crime compliance regulation reduced refresh volumes at existing clients.
- Communication, media and telecom was broadly flat sequentially; fashion, luxury and retail was flat year-on-year.
- The company now has 25 clients above USD 3 million, up from 20 a year ago.
People and operations
- Headcount rose 3.5% quarter-on-quarter, with 724 additions in offshore delivery; India seat count rose by about 1,400 to 16,824 seats as capacity in Mohali and Chandigarh became operational.
- Utilization was 74.9% versus 75.5% in Q1; attrition rose to 23.4%.
- DSO was unchanged at 79 days and top 10 client concentration was unchanged at 60%.
Cash and balance sheet
- Net operating cash flow was INR 2,694 million; the OCF-to-EBITDA ratio was 87.5%, a recovery from 38% in Q1.
- Cash and cash equivalents were INR 14,318 million.
- EPS was INR 19.6 and return on equity 24.7%.
- CapEx was INR 585 million for the quarter, taking the first half to INR 919 million.
Margin headwinds flagged for the second half
- The statutory PF wage ceiling has been revised from INR 15,000 per month to INR 25,000 per month effective September 17, 2026, which management expects to have a 20 basis point impact on margin.
- Depreciation including rent under Ind AS 116 rose to INR 558 million, or 4.7% of operating revenue, from 4.3% in the previous quarter, and is expected to rise by about another 20 basis points in the second half as seats are added in Mumbai and Pune.
- First half operating EBITDA margin was 23.5%, about 190 basis points below last year on continued investment in new locations, technology and AI; first half EBITDA in absolute terms grew 11%.
Guidance
- Management said it remains confident of the full-year operating EBITDA margin staying in the 24% to 28% range.
Outlook
- The environment remains mixed and clients continue to be selective. Momentum in emerging business and Hi-tech, new voice programmes ramping in communication, media and telecom, and a seasonal recovery in fashion and luxury are offset by volume pressure in a few BFSI accounts.
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More numbers
- Q2 operating revenue (USD)USD 127.7 million
- Q2 operating revenue (INR)INR 11,887 million
- Operating EBITDAINR 2,839 million
- Operating EBITDA margin23.9%
- PATINR 1,804 million
- New deal wins in Q2USD 31 million
- Cash and cash equivalentsINR 14,318 million
- Full-year operating EBITDA margin guidance24% to 28%
Source: BSE · 3 Nov 2026
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