PD Mundhra Executive Director of the company addressed the call

Highlights of the call:

eClerx Services is an industry-focused specialist services firm managing and improving complex data-driven processes

On sequential basis consolidated sales during March 2018 quarter grew 6% to Rs 361.13 crore. OPM fell 390 bps to 22.5% which saw OP go down 10% to Rs 81.36 crore. PAT grew 13% to Rs 64.73 crore due to jump in other income.

Q-o-Q USD revenue increased 7%.

On yoy basis consolidated sales during March 2018 quarter grew 9%. OPM crashed 830 basis points which saw OP fall 20%. PAT fell 13%.

For FY 2018 consolidated sales grew 3% to Rs 1365.06 crore. OPM improved fell 770 basis points to 26.8% which saw OP fall 20% to Rs 366.31 crore. PAT fell 18% to Rs 289.94 crore.

In FY 2018, in USD terms, operating revenue increased 2% to $ 198.6 Million as compared to USD 194.2 Million.

The company completed share buyback program of Rs 258.0 crore on 13 March 2018.

eClerx employs over 8,500 employees across its global delivery centers and offices in Verona, Phuket, Mumbai, Pune and Chandigarh plus global client relationship locations in New York, London, Philadelphia, Silicon Valley, Austin, Dublin, Milan, Munich, Hamburg and Singapore.

Increase in other income was primarily due to favorable exchange rate movement.

Total outstanding hedges now $141.3 mm at average INR 68.8/$.

Delivery cost increased in onshore delivery due to addition of TwoFour and Onshore delivery centre.

S&D grew due to increase in senior management hires and higher travel cost.

G&A was up due to increase in professional fees due to one off consulting fee, rent escalation and bad debts.

Total Cash and Cash equivalents stood at Rs 600.2 crore vs Rs 781.5 crore qoq. This is equivalent to Rs 157.3 per share vs Rs 197.3 for Q3.

DSO including unbilled grew to 93 days from 81 days qoq and 88 days yoy.

Staff Utilization (Delivery) stood at 72.4% from 72.9% qoq and 76.8% yoy.

Strategic clients i.e top 10 clients saw Y-o-Y drop of -1.6% in both USD & CC.

Emerging client saw yoy growth in $ by 41.9% and 34% in CC terms.

Offshore attrition stood at 39.6% from 38.3% qoq and 34.8% in FY 2017 end.

Its clients experienced mixed business environment in FY 2018.

On back drop of job protection, tax issues in US impacted performance.

New contracts and orders were strongest in history.

It added large clients in each of its three businesses.

The company is closest to customer it has ever been.

Digital continued strong growth with online revenues as major growth driver.

The company is winning new business from existing clients.

In 2018 the company purchased asset of TwoFour consulting, , a strategic and tactical consulting partner for banks, brokerages, hedge funds, and asset managers.

FY 2018 OPM is representative of medium term outlook and not Q4 OPM.

It will have softer growth in FY 2019.

FY 2019 will see usual impact of wage hike applicable from 1 April 2018 which were in high single digit for Indian staff and low single digit for offshore staff.

Capex during Q4 was Rs 6.55 crore against Rs 5.43 crore in Q3.

FY capex will be around FY 2018 level.

The company will adopt new account standard AS 115 effective April 2018.

Tax will be around 25% in FY 2019 as some of its old SEZ units will cease to get tax benefits.