eClerx Services Targets 24-28% Ebitda Margin In FY26 On Strong Sales, Large Deals

Business process management company eClerx Services is confident of maintaining its Ebitda margin at 24% to 28% for financial year 2025-26, according to its Chief Financial Officer Srinivasan Nadadhur.

This goal will be achieved by strengthening sales, cross-selling its portfolio and targeting larger deals, the CFO said in a conversation with NDTV Profit on Monday.

“We give a 4% range on the Ebitda margin, including other income, which is about 24% to 28% is what we had set for FY25. We ended up at 26%…we are continuing the same range for FY26…BFSI (Banking, financial services, and insurance) and cable media are the two areas. In the next two to three quarters, growth will be led by these two industries,” Nadadhur told NDTV Profit.

On being asked what the growth levers for the company will be, he highlighted three factors. One of them is strengthening its sales.

“One is to send in sales operations and effectiveness. So, there's a lot more focus on how we are selling, what we are selling, whether there are conversations maturing and how much time it is taking for deals to move down the funnel,” he said.

The second and third factors are about cross-selling the portfolio and targeting larger deals.

“The second is that we have digital services, we have technology, and we have customer experience. These we want to cross-sell across our entire portfolio, across our entire set of clients. And the third aspect is that we want to sell larger deals and not just focus on smaller deals. So, these are the three areas that we are working on actively,” he said.

Nadadhur said that the direct impact of US tariffs is “nil”. However, he acknowledged that it could have a “second or third-order impact” for the company.

“What that means as of now is not very evident to us. But we do know that a lot of their (clients') management bandwidth is being consumed on how to manage the new situation that has arisen in their business,” he said. 

Despite these potential headwinds, the demand from the US remains strong. He added that the company wants to increase its business mix from Europe and East Asia. “But the growth from the US has been very strong for us. We still continue to be heavily reliant on the US,” the CFO added.

eClerx Services recently opened new delivery centres in Lima, Peru, and Cairo, Egypt. Nadadhur said that this was driven by client demand for multilingual capabilities and broader geographical coverage.

The top executive cited two main reasons for the rising employee costs. One is a near doubling of on-shore delivery revenue. The second is increased investment in specialised and expensive analytics and technology skills, including AI. He said that while the on-shore component “will stay where it is”, the company will continue to invest in analytics and technology.

The business automation services provider is exploring inorganic growth opportunities. Nadadhur said that acquisitions in developed markets, particularly in data, analytics, or technology, are under consideration. Potential targets would represent 10% to 20% of current revenue, aligning with the company’s existing capabilities.

Shares of eClerx Services Ltd. closed 0.14% lower at Rs 3,352.1 apiece on the NSE, while the benchmark Nifty 50 ended 0.6% higher at 25,001.15.