eClerx Services Q3 Profit Jumps 40%, Announces 1:1 Bonus Issue

Introduction

eClerx Services captured investor attention after its board meeting on January 28, 2026, by announcing strong financial results for the third quarter of fiscal year 2026 and a significant corporate action. The company reported a robust 40.1% year-on-year increase in consolidated net profit, which, combined with the declaration of a 1:1 bonus share issue, led to a substantial rally in its stock price. Shares rose as much as 8.8% to an intra-day high of Rs 4,813.65, reflecting strong investor confidence in the company's performance and its shareholder-friendly policies.

Stellar Q3 Financial Performance

For the quarter ended December 31, 2025, eClerx Services posted a consolidated net profit of Rs 191.8 crore, a significant increase from Rs 137.2 crore in the same quarter of the previous fiscal year. On a sequential basis, the profit after tax grew by 4.8% from Rs 183.19 crore reported in the second quarter of FY26. This consistent growth underscores the company's ability to maintain profitability amidst varying market conditions. The profit before tax for the quarter stood at Rs 250.1 crore, marking a 35.9% year-on-year increase and a 2.1% sequential rise.

Revenue Growth and Operational Strength

The company's top line also demonstrated impressive growth. Revenue from operations for Q3 FY26 grew by 25.4% year-on-year to Rs 1,070.3 crore, compared to Rs 853.8 crore a year ago. Sequentially, revenue increased by 6.5% from Rs 1,004.85 crore in Q2 FY26. In dollar terms, operating revenue rose 20.9% year-on-year to $121.7 million, indicating healthy demand from its global clientele. This growth was supported by an expanding operational base, with the total delivery headcount reaching 21,847 as of December 2025, an 18% increase from the previous year.

Bonus Issue Announcement

In a move to reward shareholders, the company's board recommended the issuance of bonus equity shares in a 1:1 ratio. This means that for every one existing equity share of Rs 10 face value held, shareholders will receive one new fully paid-up equity share of Rs 10. The proposal is subject to shareholder approval through a postal ballot. The company plans to issue 4,70,25,359 new equity shares, which will be funded from its retained earnings. This action will double the company's issued and paid-up equity share capital from Rs 47.03 crore to Rs 94.05 crore.

Key Financial Metrics

Cost Structure and Margin Analysis

While revenue grew, the company also managed its expenses effectively. Total expenses for the quarter rose 22.86% year-on-year to Rs 794.07 crore. The largest component, employee benefit expenses, increased by 25% to Rs 654 crore, in line with the expansion in headcount. Earnings Before Interest and Taxes (EBIT) for the quarter was Rs 261.2 crore, registering a 35.9% year-on-year increase. The operating margin showed a slight sequential dip but improved on a yearly basis, indicating sustained operational efficiency.

Market Reaction and Stock Performance

The dual announcement of strong earnings and a bonus issue was well-received by the market. The stock of eClerx Services surged, closing 4.57% higher at Rs 4,623.20 on the day of the announcement. The intra-day trading session saw the stock jump by as much as 8.8%, signaling strong positive sentiment among investors. This performance highlights the market's appreciation for companies that deliver consistent growth and reward their shareholders.

Company Profile and Outlook

eClerx Services, incorporated in 2000, is a provider of business process management, automation, and analytics services to Fortune 2000 enterprises. The company serves clients across various sectors, including financial services, communications, retail, and technology, with a significant global presence across North America, Europe, and the Asia-Pacific region. The strong Q3 performance, coupled with strategic actions like the recent completion of a Rs 300 crore share buyback, positions the company favorably. The management's confidence, reflected in the bonus issue, suggests a positive outlook for sustained growth and value creation.

Conclusion

eClerx Services has delivered a strong performance in the third quarter of FY26, characterized by robust, double-digit growth in both revenue and net profit. The announcement of a 1:1 bonus issue further enhances shareholder value and reflects the company's solid financial health. As the company moves forward, investors will be watching for the shareholder vote on the bonus issue and the continuation of its growth momentum in the coming quarters.