eClerx Services Q1 FY27 Results (NSE: ECLERX)
Signal: Steady quarter
The read
Q1FY27 revenue growth remained robust at +23.3% YoY (+15.2% CC), but EBITDA margin contracted 64bps YoY to 24.2% on annual wage hikes (employee cost % rose ~280bps QoQ). PAT growth (+16% YoY) lagged EBITDA (+20.6%) as other income normalised after high revaluation gains in prior quarters. EPS fell 40.8% YoY reflecting the Q4FY26 bonus issue — investors should focus on diluted EPS (₹17.61). The margin trajectory reversed after 3 consecutive quarters of expansion, a watch item for FY27.
| Metric | Value | YoY | QoQ |
|---|---|---|---|
| Revenue | ₹115.24 Cr | 23.3% | -72.0% |
| EBIT | ₹23.35 Cr | 18.1% | |
| Net profit | ₹16.43 Cr | 16.0% | |
| EPS | ₹17.86 | -40.8% | |
| EBIT margin | 20.0% |
P&L walk
Revenue grew 23.3% YoY but EBITDA margin compressed 64bps YoY to 24.2%, primarily due to wage hikes effective April 1, 2026 (delivery employee costs rose ~9.4% QoQ as % of revenue). Other income fell ~36% QoQ on lower revaluation gains (INR depreciation slowed), dragging PAT growth to 16% YoY vs 20.6% EBITDA growth.
Key positives
- Constant currency revenue growth of 15.1% YoY and 2.9% QoQ — above trend.
- ACV of new deals at $40.8 mm (vs $46.0 mm in Q4FY26), indicating healthy deal pipeline.
- Offshore voluntary attrition fell to 18.1% (21.7% in Q4FY26), and delivery utilization improved to 75.5% (74.2% in Q4FY26).
- DSO days reduced to 79 from 81 QoQ — improvement in collections.
Key concerns
- EBITDA margin compressed 64bps YoY and 330bps QoQ to 24.2% on annual wage hikes; OPG EBITDA margin down 96bps YoY.
- EPS fell 40.8% YoY due to bonus issue — diluted EPS ₹17.61 still down ~38% YoY vs PAT growth of 16%.
- Other income declined ~36% QoQ to ₹179 Mn on lower revaluation gains, tempering bottom-line growth.
Research and educational content only. Not investment advice.