eClerx expands revenue, but sequential margin slips
Year-on-year profitability improved, though higher costs, tax and other-income dependence weighed on the quarter-on-quarter outcome.
Filed 13 May 2026, 18:49 IST · after market close · eClerx Services Ltd (ECLERX)
Key takeaways
- Consolidated revenue grew 23.27% YoY as expenses rose 21.19%, lifting operating margin by 1.28 percentage points.
- Sequential momentum weakened at the margin: expenses grew 3.73% against 3.45% revenue growth, trimming operating margin by 0.20 percentage points.
- Other income contributed 11.81% of pre-tax profit, while the 1.46-percentage-point rise in the tax rate limited the benefit of operating growth.
Price around the results
Revenue growth remained broad, but EPS diverged
Consolidated revenue rose 23.27% YoY and 3.45% QoQ, with operating profit growing faster than revenue on a yearly comparison. Net profit increased 24.34% YoY to Rs 189.65 cr, but basic EPS fell 36.76% to Rs 20.47, indicating that per-share earnings did not track the reported profit increase. Management said FY26 headcount reached 22,639, including 18,586 offshore delivery employees.
Costs pushed the Q4 margin lower sequentially
Quarter on quarter, expenses grew 3.73%, faster than the 3.45% increase in revenue, so operating margin narrowed by 0.20 percentage points. The margin was also below the 31.15% median of 12 Services peers that had reported, by 5.54 percentage points. Management reported delivery-staff utilisation of 74.2% in Q4FY26.
Margin has eased for two consecutive quarters
Operating margin improved 1.28 percentage points YoY, but it has declined from 26.98% in Q2FY26 to 25.81% in Q3FY26 and 25.61% in Q4FY26. The sequential profit pressure also reflected an 18.47% rise in interest expense and a 1.42-percentage-point increase in the tax rate. Other income accounted for 11.81% of pre-tax profit, making reported earnings partly dependent on non-operating income.
New-deal value rose, according to management
The company said ACV of new deals, excluding CLX, was $169.9 million in FY26. This commentary provides a bookings indicator alongside the quarter's reported revenue, but the presentation does not connect the deal value to a specific near-term revenue contribution. The reported utilisation rate and offshore delivery headcount remain the operating indicators to track against that order flow.
Initial market decline was smaller than its usual result-day move
After the results were filed after market close, the stock fell 0.86% on the first trading day and 3.17% by the next day, before a 0.35% gain by day five. Across the previous eight results reactions, moves were evenly split between four rises and four falls, with a median absolute move of 5.88%, so the initial decline was smaller than its typical historical reaction.
Q4FY26 at a glance
Consolidated figures as filed with NSE — cross-checked against an independent source.
| Line item | Q4FY26 | Q3FY26 | QoQ | YoY |
|---|---|---|---|---|
| Revenue | ₹1,107 cr | ₹1,070 cr | +3.45% | +23.27% |
| Other income | ₹30 cr | ₹30 cr | -1.03% | -6.77% |
| Expenses | ₹824 cr | ₹794 cr | +3.73% | +21.19% |
| Operating profit | ₹284 cr | ₹276 cr | +2.65% | +29.73% |
| Operating margin (%) | 25.61% | 25.81% | — | — |
| Interest | ₹12 cr | ₹10 cr | +18.47% | +8.91% |
| Depreciation | ₹50 cr | ₹46 cr | +7.23% | +21.24% |
| Profit before tax | ₹252 cr | ₹250 cr | +0.73% | +26.76% |
| Tax | ₹62 cr | ₹58 cr | +6.84% | +34.73% |
| Net profit | ₹190 cr | ₹192 cr | -1.13% | +24.34% |
| EPS (₹) | ₹20.47 | ₹40.81 | -49.84% | -36.76% |
Operating margin of 25.61% compares with a Services sector median of 31.15% across 12 peers that have reported Q4FY26.
How the stock reacted
| Window | Stock | vs NIFTY |
|---|---|---|
| Results day | -0.86% | -2.04% |
| Next session | -3.17% | — |
| 5 sessions | +0.35% | -0.69% |
| 15 sessions | -9.90% | — |
| 30 sessions | -12.17% | — |
Volume on the results session was 1.31× its 20-day average.
What management said
From the company’s own investor presentation. Each point is checked against the source document before it appears here.
This quarter
- FY26 Q4 delivery staff utilization was 74.2%.
- Total headcount reached 22,639 in FY26 Q4, including 18,586 offshore delivery employees.
New orders
- ACV of new deals, excluding CLX, was $169.9 million in FY26.
What to watch
- Whether operating margin recovers from 25.61% after two consecutive quarterly declines.
- Whether delivery-staff utilisation moves from 74.2% as headcount stands at 22,639.
- How the $169.9 million FY26 ACV of new deals, excluding CLX, is reflected in subsequent revenue.