eClerx Services Limited Q2 Revenue Rises 18% to INR 11,887 Million

eClerx Services Limited reported Q2 FY27 operating revenue of INR 11,887 million, up 18% year on year, while operating EBITDA margin improved 90 basis points sequentially to 23.9%. The September-quarter result extended eClerx's revenue growth streak, although management flagged higher provident-fund costs and depreciation in the second half.

What did eClerx report for Q2 FY27?

eClerx reported operating revenue of INR 11,887 million for the quarter ended September 30, 2026, representing 18% year-on-year growth. In US dollar terms, operating revenue was USD 127.7 million, up 10.6% year on year and 1.5% sequentially. At constant currency, dollar revenue grew 12.9% from a year earlier.

Total revenue, including other income, was INR 12,126 million, up 17.1% year on year and 3.6% sequentially. Other income was INR 240 million. The company said this was its 13th consecutive quarter of sequential revenue expansion, despite what management described as a mixed demand environment.

Operating EBITDA was INR 2,839 million and the corresponding margin was 23.9%. Profit after tax stood at INR 1,804 million, translating into a 14.9% margin. Reported earnings per share were INR 19.6, while return on equity was 24.7%.

What drove eClerx's revenue and margin performance?

eClerx said analytics and automation revenue, along with its emerging-growth business, continued to support growth. The company has been investing in AI and technology capabilities while expanding delivery capacity, which management linked to its effort to sustain growth in the current demand environment.

The operating EBITDA margin rose by 90 basis points quarter on quarter to 23.9%. Management attributed much of the improvement to delivery costs, which improved by about 110 basis points, primarily due to rupee depreciation. The reported operating revenue includes the gain or loss on the company's hedge book and was calculated at an implied exchange rate of INR 93.1 per US dollar.

The margin improvement was partly offset by higher overheads. General and administrative expenses increased by around 14 basis points, mainly due to legal and professional fees. Selling and distribution costs increased by about 10 basis points. For the first half of FY27, operating EBITDA margin was 23.5%.

How is eClerx expanding its delivery capacity?

eClerx increased its India seat count by about 1,400 during the quarter to 16,824 seats, as added capacity in Mohali and Chandigarh became operational. Headcount rose 3.5% sequentially, including 724 offshore additions. These additions indicate that the company is building capacity alongside revenue growth.

Capital expenditure was INR 585 million in Q2, taking first-half capital expenditure to INR 919 million. The company also said it expects to add more seats in Mumbai and Pune during the second half of FY27. These planned additions will support operations but will also keep depreciation and amortisation elevated.

Depreciation, including rent accounted for under Ind AS 116, rose to INR 558 million, equal to 4.7% of operating revenue, from 4.3% in the preceding quarter. Days sales outstanding remained unchanged at 79 days. The top 10 clients accounted for 60% of revenue, with concentration unchanged during the quarter.

What could affect eClerx's margins in the second half?

eClerx expects higher statutory provident-fund costs and depreciation to weigh on second-half margins. The government revised the statutory PF wage ceiling from INR 15,000 a month to INR 25,000 a month, effective September 17, 2026. Management estimated that this change would have an impact of around 20 basis points on margin.

The expected addition of facilities and seats in Mumbai and Pune will raise depreciation and amortisation further. Management said depreciation and amortisation could increase by approximately another 20 basis points in the second half. This follows the increase already recorded in the September quarter after new facilities became operational.

Despite these identified costs, the company said it remained confident of being within its full-year margin range of 24% to 28%. This range is management's stated outlook and depends on operating conditions, currency effects, staffing costs and the pace of planned capacity additions.

Why do these results matter for investors and operations?

eClerx's results show revenue growth continuing across both rupee and dollar measures, with a sequential improvement in operating margin. The 18% year-on-year rise in rupee operating revenue was stronger than the 10.6% growth reported in US dollars, reflecting the effect of currency translation alongside underlying constant-currency growth of 12.9%.

For investors, the key operating indicators include the 23.9% operating EBITDA margin, stable DSO of 79 days and INR 14,318 million of cash and cash equivalents. However, the second-half cost factors identified by management are relevant because PF changes and higher depreciation are expected to affect margin calculations even as revenue capacity expands.

For employees and local operations, the increase in India seats and the commissioning of Mohali and Chandigarh capacity indicate continued investment in delivery infrastructure. The planned Mumbai and Pune additions point to further operational expansion, while management noted that attrition rose marginally after wage increments in the first quarter.

Conclusion

eClerx delivered higher Q2 FY27 revenue, expanded operating margin sequentially and added delivery capacity in India. The results were supported by analytics, automation and emerging-growth businesses, while rupee depreciation contributed to lower delivery costs and helped improve margin performance.

Investors will watch whether eClerx remains within its 24% to 28% full-year margin range as the revised PF wage ceiling takes effect and planned Mumbai and Pune capacity additions lift depreciation and amortisation in the second half.