eClerx Services share price extended losses after the company reported mixed earnings during the quarter ending September 2026. The stock declined as much as 8.39% to Rs 1,521.00 apiece on the BSE.
While better-than-expected revenue growth, aided by short-term engagements, provided some support, a significant deterioration in profitability weighed on investor sentiment. Following the results, brokerages cut their target prices on the stock, citing weak deal wins and concerns over margin pressures.
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The company's consolidated net profit in Q2FY27 fell 1.5% to Rs 180.39 crore from Rs 183.19 crore in the corresponding quarter last year. On a sequential basis, net profit rose 10% from Rs 164.2 crore in the previous quarter.
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Revenue from operations in the September quarter increased 18.3% year-on-year (YoY) to Rs 1,188.66 crore from Rs 1,004.85 crore a year earlier. eClerx reported USD revenue of $127.7 million, up 1.5% QoQ.
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At the operating level, earnings before interest, tax, depreciation and amortisation (EBITDA) rose 5% to Rs 283.8 crore from Rs 270.2 crore, while the EBITDA margin narrowed to 23.9% from 26.91%, YoY
Deal wins were weak, down 33% YoY, due to both delayed decision-making and smaller deal awards as clients adopt Al into their operations.
According to Kotak Institutional Equities, tepid deal wins limit growth visibility, while improvement in conversion was required to sustain double-digit revenue growth. A steep YoY EBITDA margin decline raises investor concerns regarding the impact of Al deflation on the business.
Here's what brokerages said on eClerx Services Q2 results
Nomura On eClerx Services
* Maintains Neutral; cuts target price to Rs 1,710 from Rs 1,850.
* Q2 constant-currency revenue grew 1.4% QoQ, while EBITDA margin declined 310 basis points YoY to 23.9%.
* Annual contract value declined 33% YoY to $30.8 million amid weak deal wins.
* Cuts FY27–FY28 EPS estimates by 7–8%, citing client budget pressures and longer decision-making cycles.
Kotak Institutional Equities On eClerx Services
* Maintains Sell; revises fair value to Rs 1,450.
* Expects revenue growth to decelerate to high single digits in the second half of FY27.
* Weak deal wins and smaller AI-related contracts pose risks to the sustainability of double-digit revenue growth.
* Cuts FY28–FY29 EPS estimates by 5–6%, flagging structural pressures on profitability.
At 9:30 AM, eClerx Services share price was trading 7.39% lower at Rs 1,537.55 apiece on the BSE.
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