InvestorQ : What is your view on the quarterly numbers of Eclerx Ltd?
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What is your view on the quarterly numbers of Eclerx Ltd?

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Riya Dwivedi answered.
2 weeks ago
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IT outsourcing company, Eclerx, Q2 net profit were up 40.6% yoy at Rs.61.45 crore as more orders were farmed out and pricing also improved for the company. Top line was almost flat with 1.21% growth in the Sep-20 quarter at Rs.361 crore. However, it is likely to benefit in a big way from higher IT spends by most of the large companies.

Let us take a look at the revenue mix for the quarter. Almost 81% of the revenue basket is still dollar denominated while the share of North America has come down from 71% to 66%. There has been a proportionate increase in Europe business but the US dependence is huge.

There is a slightly better onsite / offshore mix. Eclerx gets 23% from onshore revenues while 31% comes from managed services. It has seen a near 600bps improvement in staff utilization in this quarter at 79.1%. Overall, the company gives the picture of a healthy machinery.

On the operations front, the operating profits were up 36.4% at Rs.82.4 crore on the strength of a more aggressive effort to manage costs efficiently. This has been implemented by the company considering the current constraints. As a result, the operating margins expanded from 16.96% to 22.84%.

Net profits for the Sep-20 quarter as measured by PAT were up 40.59% at Rs61.45cr. Apart from better operating profit, lower taxes also helped. This led to the net margins expanding from 12.26% to 17.03% in Q2.

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