eClerx Services Limited (NSE: ECLERX) Q4 2025 Earnings Call dated May. 15, 2025
Corporate Participants:
Unidentified Speaker
Kapil Jain — Managing Director & Group Chief Executive Officer
Srinivasan Nadadhur — Chief Financial Officer
Analysts:
Unidentified Participant
Mihir Manohar — Analyst
Manik Taneja — Analyst
Dipesh Mehta — Analyst
Sandeep Shah — Analyst
Vedic — Analyst
Girish Pai — Analyst
Varun — Analyst
Vikas Khemani — Analyst
Presentation:
operator
Hi everyone, Good day and welcome to Q4FY25 earnings call of Eclipse Services Limited. Please note that this webinar will be recorded to take us through the results today and to answer your questions. We have with us the top management of Eclipse represented by Kapil Jain, Managing Director and Group CEO and Srinivasan Nadaru, Chief Financial Officer. We will start the call with brief opening remarks by Kapil followed by Srinivasan who will be sharing the financial update and we will then open the floor for Q and a session as usual. I would like to remind you that anything mentioned on this call that gives any outlook for the future or which can be construed as forward looking statement must be viewed in conjunction with the risk and uncertainties that we face.
This risk and uncertainties are included but not limited to what we have mentioned in the prospectus file with the SEBI and subsequent annual reports which you can find on our website. Having said that, I will now hand over the floor to Kapil. Over to you Kapil.
Kapil Jain — Managing Director & Group Chief Executive Officer
Thank you Asha and good evening everyone. I am pleased to share the highlights of our performance in FY25, Q4 and full year. Last year around the same time I laid out our three pronged strategy which revolved around strengthening sales operations, mining existing clients, winning new logos and enhancing our market positioning. We have made good progress on all these three fronts. We have also elevated our visibility through analyst recognitions and our new industry service aligned go to market approach. Now coming to numbers, we reported strong revenue growth in Q4. Operating revenue was 104.9 million up 4.2% sequentially.
In INR terms Q4 operating revenue was INR 8983 million up 5.2%. Margins came in stronger as well. EBITDA for Q4 was INR 2505 million at a margin of 27.3% up 9.8% sequentially. PAT for the quarter was INR15.22 million at a margin of 16.6% up 11% sequentially for the full year. Revenue was 397.6 million up 12.3% over FY24 in dollar terms EBITDA was INR 8946 million up 6.4% and the PAT of INR 5411 million was up 5.8%. Our deal wins for the quarter were $51 million and for the full year we did 140 million. Analytics and automation went up by 17% year on year as we Mentioned in the last quarter we opened a new delivery center in Lima, Peru.
We have also opened a delivery center in Cairo, Egypt. Operations in Lima have already commenced. These new centers will allow us to capture larger share of our existing clients wallet. I would like to share some commentary and outlook about our three businesses. In bfsi we see broad opportunities across large and small new clients, particularly in regulatory and compliance and change. Market volatility has increased due to the tariff and the uncertainty. Certain transaction volumes in some domains around our trading operations. Fashion and luxury continues to remain under pressure with the US market underperforming and inherent weakness in the China market, High tech manufacturing and distribution remains positive.
Clients budgets are concentrated on digital transformation and customer experience programs. Tariff changes are consuming management bandwidth of our clients in manufacturing and distribution segment and may lead to some slowdown in decision making. Momentum around new logo acquisition and cross sell of customer service continues and our cross sell strategy seems to be working well. We have also started delivering our care services from Manila and Lima and as I mentioned a little while earlier, we will start shortly from Cairo as well. On technology, we see a continued interest in our productized service offerings of compliance manager and market intelligence coming over to some of the recognition from our clients.
We have been named as Partner of the year 2024 by a leading Fortune 100 global media and telecom company. Additionally, we won four other awards at the same event. This extraordinary achievement is a testament to our customer focus, innovation and exceptional service delivery. The strong finish to the year gives us momentum for the next fiscal and we are cautiously optimistic about our prospects for FY26. I also want to share the 2025 marks the 25th year of Eclurks. I have completed two years here. As PD Anjan and I reflect on this journey, we feel immense gratitude to all those who have contributed to the firm’s success.
Eclurks is what it is today because of our people, our employees and our shareholders and the community partners. We are thankful to our clients and partners for having placed their trust in us and for giving us the opportunity to be part of their journey and helping them stay relevant. We look forward to their continued support in the future. Thank you and over to Sriniv for a more detailed commentary.
Srinivasan Nadadhur — Chief Financial Officer
Thank you Kapil and good evening everyone. As Kapil mentioned, performance this quarter has been strong on both the revenue and the margin front in constant currency terms. Operating Revenue was up 4.4% including other income. Total revenue was 9165 million up 4.07% sequentially. Other income for the quarter was 183 million primarily owing to apprentice benefits from government skill development initiatives on a Q on Q basis. There was margin expansion in both EBITDA and PAT of about 130 and 90 bips respectively. This was driven by the strong revenue uptick in the quarter and the reduction in GNA because of lower rental and technology costs.
There is a one time reclass of 120bps from delivery to S and D and so the right way to look at the Q on Q figures is that SD costs are flat while delivery is down by about 100 dips. EBITDA for the full year came in at 26% which is right in the middle of our stated range from this quarter onwards. As you would have noticed in the investor presentation, we are reporting revenues in five industry buckets. BFSI, CMT, High Tech and MND which is a B2B facing business, fashion and luxury and retail which is a B2C facing business and emerging.
We hope this will give investors a better view of the work we do. Please also note that the analytics and automation figures have been restated by removing revenue which we felt did not belong in this bucket. Coming to other metrics, DSO is is in the same range as the preceding few quarters. Staff utilization is the same as the last quarter. Client concentration has gone up to about 64% for top 10 clients. Seating capacity has gone up somewhat with the new client facilities in Lima and Cairo. Exit headcount has increased by 4% to 19,400 and attrition is at 24% which is par for the course.
Thank you everyone. And with this we conclude our prepared remarks. We can now move over to the Q A. Over to you Asha. Thank you.
Questions and Answers:
operator
Thank you. Thank you. We will open the floor for Q A session now. Request participants to click on raise hand button to ask questions. I think we have first question from the line of Mihir Manohar. He is from Carnelian. Please go ahead.
Mihir Manohar
Yeah, hi. Am I audible?
operator
Yes.
Mihir Manohar
Yeah, sure. Thanks for giving the opportunity and congratulations on great set of numbers. Kapil largely wanted to understand on the deal win side. I mean $50 million of deal win for the quarter. I mean, you know what part of the deal, I mean is it more granular or is it let’s say coming from concentration, concentrated accounts. How to understand that and which area is driving this deal in? I mean is it, is it customer support, is it capital markets, is it regulatory? How to understand that?
Kapil Jain
So Mihir, I think for the quarter the deal win, like I said is 51 million and for the year is about 140 million. The wins are around our key focus areas which is Reagan compliance, customer operations. Because here we see larger opportunities both on site and offshore. And in terms of FY26, we definitely expect year on year to do better. I think we don’t look at quarter on quarter numbers. We are looking at medium to long term. And the directionality, like I said, the strategy which we laid out is working well both on cross sell upsell and mining our existing accounts.
Mihir Manohar
Sure, sure. Is there, I mean more concentration on these deals or is it spread out?
Kapil Jain
There is like there may be some like with. With a few clients. But I think overall if you look at, like we have said in the past, don’t look at quarterly number to see a trend. If you look at on a yearly basis, it’s fairly well spread out.
Mihir Manohar
Sure, understood. Fair point. Just on customer ops side, I mean would the margins be similar to the company levels or should one see some, you know, given the fact that this is, I mean largely a commodity part of the piece. So how to understand margins for customer ops versus rest of the business?
Kapil Jain
Yeah, so Meer, we don’t disclose margin at a individual vertical level. Like I had said that our margin we will continue to maintain in the zone 24 to 28. I know you guys had requested us to narrow the range. We revisited it. But we’ll continue to guide between 24 to 28% for FY26 at a portfolio level. We will manage that margin and also show a sequential growth on EBITDA and Pat.
Mihir Manohar
Sure, fair point. Just one last question on this. Is this coming from existing client or is this from new clients?
Kapil Jain
It’s coming from both existing and new. Which is what I said in the beginning that the strategy that we had laid out to mine existing client cross sell services as well as open new logos is working well.
Mihir Manohar
Understood. Sure. And just on the Trump administration side, last time during Trump 1.0 we had seen a couple of accounts resorting to insourcing. Do we see that challenge during the Trump 2.2 administration? Any clarification around that? Any client interaction, customer interaction around that would be helpful.
Kapil Jain
Sorry, can you elaborate on the question? I am not sure.
Mihir Manohar
So I mean during the first term of Trump administration we had one or two accounts which resorted to insourcing. I mean now with Trump administration 2.0, do we see that challenge for us?
Kapil Jain
So far we haven’t seen anything.
Mihir Manohar
Me sure, yeah, that’s it. From my side. Thank you very much.
Kapil Jain
Yeah.
operator
Thank you Mayor, we have next question from the line of. He is from Access Capital. Manik is. Go ahead. Hi.
Manik Taneja
Thank you for the opportunity and congratulations on the steady performance. My question was on two things. If you could talk about the very solid growth that we’ve seen in our top 5 client base over the course of FY25 and should how should we be thinking about our emerging client growth because that continues to remain very subdued as well as the fact that there is very little movement when it when I look at your client metrics across different buckets. So that’s question number one. The second question is that typically our hiring tends to give us a good perspective of near term growth.
And if I look at the the hiring for the quarter is possibly the highest in. In almost five, six quarters. So should. Should that be an indicator of of how we are expecting our near term sequential growth to trend?
Kapil Jain
So Manik, thanks. So if you look at our top five and top 10 clients, they are Fortune 100 companies. And I think if you look at our productized services kit, many of it are relevant for our existing clients and the way we have organized ourselves now around industry and services and capabilities is resonating well with the clients. As far as your question that how is the client mix changing in the three buckets there is a very concerted focus effort to grow accounts outside of top 10. Obviously because the num. The base is smaller. We are looking at absolute growth in and and we are measuring and monitoring that and with the cross sell initiatives and with the some of the changes greater focus, we do expect that that will yield positive results.
Even if you look at year on year, this year versus last year, our 0.5 million and above clients outside of top 10 average revenue per client has increased. It’s increased marginally. So nothing to write home about anything. But there is a very concerted focus on growing that bucket. But we. It’s not to say that we will not grow in top 10 because these are all Fortune 100 companies and these are large clients with very strong credit history and there are a lot of our service offerings that are relevant in those clients. Sure.
Manik Taneja
And the second question was for Srini.
Srinivasan Nadadhur
Yeah,
Manik Taneja
Srini. Basically if I look at yours, I think you mentioned your opening remarks that there’s some amount of reclass from from cost of revenues to S, S and M expenses and that’s the reason why S and M seems to have jumped up. If you could talk about some of the sales and marketing investments that you’re doing. Because if I look at the head Count metrics that you disclose that number after. After increasing in between essentially is once again back to where we were last year. So if you could talk about how are we thinking about some of these, some of the investments on this side.
Srinivasan Nadadhur
So I guess some of the headcount changes are purely because of performance reasons and realignment between what couples focus areas are and that number. We expect to expect that as we try to double down on growth that number should go back up again. I think you had also asked about hiring for the quarter so directionary you are right. In the last few quarters generally our headcount and revenue growth are broadly in line and.
Manik Taneja
And that natural trend should hold true through FY26 as well. That’s the sense that you’re giving us.
Srinivasan Nadadhur
Yeah, hopefully. Yes,
Manik Taneja
sure. Thank you. And all the best for the future.
Srinivasan Nadadhur
Thank you.
Kapil Jain
Thank you.
operator
Thank you. Manik. We have next question from the line of Dipesh Mehta is from MK Security. Depesh, please go ahead.
Dipesh Mehta
Yeah, thanks for the opportunity and congrats for steady quarter and strong execution. First question is about I think in your one of the question answer you said you expect FY26 to be better than 25. I just want to confirm whether we make that statement in terms of full year growth. Second question is about the role of trends. Are we witnessing any change in the role of trends compared to let’s say when we started FY25. Third question is about sales effectiveness. If I look our business development team remain fairly stable while our deal intake has materially increased in this year almost over 50 percentage growth.
So if you can help us understand what is driving it and whether it is because of couple of chunky deal which explains it and that performance is likely to reverse when you don’t have those chunky deal or there is some structural changes which is happening. Thank you.
Kapil Jain
So Dipesh, the first question you wanted to understand what I said what ACV of the deals for the full year we delivered 140 million. We expect to show an increase in the ACV of the deals for the full year for FY26. That’s point number one. Second question was on rule of trends on the role of trends. We have not seen any adverse. So I think it around. It’s around the same number. So neither we are seeing a higher or a lower trend on the roll offs. So that’s I think is your second question and sales effectiveness.
I think what’s driving it is like I said right in terms of the cross sell opportunities that we had identified the one Eclipse theme that we are driving is resonating well with the clients on the back of our strong delivery. So if in a particular service kit our delivery is strong and we are trying to take or talk to the client for another productized services that’s resonating well with the clients and hence more rigor on sales reviews planning is what is helping us bring in higher momentum in the sales organization.
Dipesh Mehta
Just on so 26 and 25 comparison which you give it is for deal intake, not for revenue growth.
Kapil Jain
No, for ACV of the deals.
Dipesh Mehta
Understand and in a way it partly reflect your pipeline likely to be similar or better than let’s say when we started FY25. That is right way to understand it.
Kapil Jain
Yes. Pipeline. We are continuing to build the pipeline. So FY26 pipeline is better than when we started in FY25.
Dipesh Mehta
And last question. Can you help us understand how many new logos which we might have added in FY25 and similar number. Let’s see if you can provide for FY24. Thanks.
Kapil Jain
So we don’t report that number. I think we are looking at the client buckets which we have laid out in three segments. Top 10 Greater than half a million and the rest. And there like I said to the previous question when Manik was asking There is a concerted 4 focus to grow outside of top 10. We don’t see from a client concentration 64, 65%. We will continue to grow in our top 10 as well because I think there is still a lot of opportunity that exists in our top 10 clients with the service offerings that we have and the relevance that we have for these clients.
Did I answer your question Dipesh?
Dipesh Mehta
Yes, it does. Thanks.
Kapil Jain
Thank you.
operator
Thank you dipesh. We have next question from the line of Sandeep Shah from Equity Securities. Please go ahead.
Sandeep Shah
Yeah, thanks. Thanks for the opportunity and congratulations on a very strong execution on most of the aspects. So just wanted to understand looking at the TCB wins which are showing a solid trend and the growth on an organic basis, is it fair to assume that is it more coming through wallet share increase within our clients or is it you believe the outsourcing demand is increasing in an uncertain macro?
Kapil Jain
I think I would put it as a former. But I think it’s in as you know, in when there is uncertainty, clients like people shy away in making decisions any amount, any volatility on either side. I think it’s more driven from our existing clients and capturing a larger wallet share.
Sandeep Shah
Okay. Okay. And just a continuation of Dipesh question your outlook for FY26 better than FY25 is more on ACV of new deals, correct?
Kapil Jain
Yes, that’s correct.
Sandeep Shah
And sir, you also made a comment that there is no major significant change in the rollout. So in that scenario, with a higher order book in FY25 that can even translate into better growth than what we reported in FY25. In FY26 I am asking
Kapil Jain
Sandeep, I’ll. Lay out the assumption that if the time series of the deals that we closed in FY25 stays exactly the same in FY26, then the answer is yes, but it may not happen. Some like the momentum that we had in FY25 versus FY26 when you close is it in Q1 versus Q4? That’s really, I think what will also determine the Y on Y growth. I think in terms of FY26, like I had said in the beginning, I want to reiterate the same thing. On margins, we are giving a band of 24 to 28. I know you guys have requested us to narrow the band.
There’s a reason why we have chosen to stay in the band because we are looking at growth opportunities. We are opening up new centers that we have opened up in Lima and Cairo and initially as and when you open a center there will be some headwinds on the margins. Second is we would show sequential growth on I, Beta and pad and third is we will be in the top quartile of the industry growth. These are the three things I had said and we continue to maintain which also gives us the confidence that the strategy that we laid out at the beginning of last year is working well.
So we are not making any changes. Minor tubes here and there, but we are not changing the overall direction in which we are heading.
Sandeep Shah
No thanks for the detailed answer. Just few questions. Any status update in terms of how are we progressing in Gen AI and Agent TKI both on a reactive and proactive basis? What I mean by reactive is it client asking for a productivity gain or you still believe they are in the phase where investment will lead to additional demand related to adoption of Gen AI Agent AI or you believe with that we have to keep passing on some productivity gains back to the clients.
Kapil Jain
So Sandeep, I think we have never shied away in passing any productivity gains to the clients because I think we will never shied away from cannibalizing our revenue. If technology is, as I had said in the previous calls is our biggest differentiator. There are services that we deliver on the Back of our IP where we have our services, we are delivering on the where we are leveraging our own IP which we are enabling with gen AI and making it more and more relevant. So that’s the one bucket. Second is on the pure tech analytics data revenue that we are seeing greater traction and on the third bucket where we are working of client systems where we are looking at agent AI and also looking at change opportunities and wherever we are able to give client productivity.
It’s not like we are seeing a massive ask because we are not selling tech and ops or services separately. Large portion of our book is around our productized services where we are using our IP and working on the client systems where we are using agentic AI and trying to stay ahead of the curve.
Sandeep Shah
Non linear productorized service revenue would be how much percentage of total?
Srinivasan Nadadhur
So I think BPAs is about 19 or 20% that you will see on the metric slide. But that’s one of the metrics that I also mentioned earlier that we may reconsider and decide to revise how we are showing it. We are looking at seeing how we can show this productized services metric which is which we believe is a better indicator of the impact that technology, our own technology has on our book. So that metric may get replaced with something more relevant for others.
Sandeep Shah
Last couple of question on the margin. So this year you said FY25 it would be between 2428 and we actually ended up at the midpoint and this strategy bearing fruits. Is it fair to assume there would be more operating leverage opportunities in FY26 versus FY25 and we could be slightly better if not lower in terms of the margin.
Kapil Jain
Sandeep, like I said, like there will be tailwinds and headwinds. The tailwinds would be like you said then we may get some benefit of the operating leverage. But I always said that we are a growing business and we are focusing on driving profitable growth. The headwinds would be the new centers that we have opened. As you know any new center that we have opened will take time to deliver profitable growth. And despite that we are saying we’ll maintain the same band as we had laid out last year.
Sandeep Shah
Okay. Okay. And just sir, last question. The nature of this losses in the investment at a fair value basis 13:14cr what is the nature of this investment? What are the underlining asset where we had such a considerable loss in a 1/4.
Srinivasan Nadadhur
So actually this pertains to a loss, long term loss that was eligible for in 2016-17 that was eligible for carry forward and set off, you know, as the IT laws allow for about eight assessment years. And that was going to expire on 31st of March. And we had made long term investments with the perspective to offset against those capital losses. And when we actualize, the gain is recorded in other income but the accrued fair value of this investment in the start or guidelines is reversed in the other expense. So in the investor ppt, we have netted these gains because that is the right way of looking at it.
But that accounts for the difference between what is reported on the console P L versus what we show on the ppt.
Sandeep Shah
Okay. And this nature of investment are mutual fund, FNP or liquid?
Srinivasan Nadadhur
Yes.
Sandeep Shah
Okay. Okay. Thank you. I will come in the follow up if I need. Thanks and all the best.
operator
Thank you. Sandeep. We have next question from the line of. He’s from Unify Capital. Vedic, please. Bird. You are on mute.
Vedic
Okay. Hi. Hi. Gentlemen. Good morning. Kapil and Srini, congrats on a great set of numbers at a very broad level. And actually this is a continuation of Sandeep’s question. We know for a fact that there is a bit of cost deflation on delivery models given the progression of agentic AI, especially in our areas of transaction processing and service delivery. So I was just trying to understand, given the absolute growth of ACVs we’ve had in Q4, could you perhaps help us understand what the new business really entails in terms of does it have a higher element of volume which is offset by an even higher element of AI or are these traditional projects which are, you know, automation and people led? I’m just trying to understand the composition of the new events that you might have had.
Gentlemen.
Kapil Jain
So good morning. I think it’s not volume growth which could like, like you said on the agentic AI side, it’s related to change, it’s related to migration projects. And I think. And it’s across a broad spectrum of our services and across clients.
Vedic
Right, right. So, so, so I would be right in assuming that, you know, the mix of projects that you might be winning is not very different in terms of the traditional people LED and automation LED delivery models. Right. I mean there is, there is no change in that underlying.
Kapil Jain
Yes, no change, no significant change to see a trend.
Vedic
Right, right. And in terms of, you know, your comment on the pipeline for 26 being better than 25, you know, what’s, what’s the genre of these, are these vendor consolidation LED transactions that industry is seeing around cost optimization or perhaps would there be newer areas of outsourcing that clients are opening up to in terms of process automation, in terms of efficiency. I’m just trying to understand, you know, the nature of pipeline that’s building up, which kind of gives you this kind of optimism.
Kapil Jain
So B, I think it’s a combination of all the two, two things that you said, both in terms of clients looking at more efficiency, a stronger delivery partner as well as new areas.
Vedic
All right, thank you gentlemen. All the best.
Kapil Jain
Thank you. Thanks.
operator
Thank you. We have next question from the line of Girish. He’s from Bob Capital Markets. Girish please go ahead. Girish, please unmute yourself. We are not able to hear you. You are on mute. We’ll go for next question which is from the line of Dipesh Mehta.
Dipesh Mehta
Yeah, thanks for the opportunity again couple. I think I last May also I asked you this question on the first year of I think your operational management kind of thing. You said four year strategy, revenue growth top quartile and EBITDA margin higher. I asked about EBITDA absolute growth. Can you help us understand let’s say are we confident about top quartile revenue and absolute EBITDA growth in this four year journey of ours?
Kapil Jain
Sorry, what was the last. Can you repeat the last point in the four year journey?
Dipesh Mehta
Revenue and absolute EBITDA growth. EBITDA margin. I think we already have a healthy margin compared to peers. I am referring to, let’s say this year we did 15 percentage kind of revenue growth, 6 percentage EBITDA growth. I am referring four year journey. When we complete are we confident it would be top quartile EBITDA growth? Also.
Kapil Jain
I think like I said we are comparing ourselves because in terms of our margin range will be 24 to 28% and revenue percentage we will be in the top quartile growth. In absolute revenue terms we will show a growth. I cannot comment whether we will be in absolute EBITDA growth in the top quartile or not. I think you have to look at three metrics and then make a decision on that basis.
Dipesh Mehta
Okay, second question is on the deal ACV side as far as the I remember your our definition is it include net new, it doesn’t include renewal.
Srinivasan Nadadhur
That’s right.
Dipesh Mehta
That is right. Definition.
Srinivasan Nadadhur
Yes.
Dipesh Mehta
Okay. Can you provide some color around the vertical kind of thing? So let’s say this quarter it is a fairly strong deal intake. How it is whether it is broadways across vertical or one there is a skewness to some extent. And last question is about Europe. I think Europe remain fairly weak this quarter but some of that weakness is not visible in let’s say on fashion and luxury. So if you can provide let’s say what led to sizable weakness in Europe. Thanks.
Kapil Jain
So I think if you look at bulk of our growth has come from financial BFSI and CMT segment and our CEO customer care business we are beginning to see growth in high tech and MND as well. So that’s the commentary on the overall growth and the Europe and the CLX business we spoke about on high end fashion and luxury that that continues because the clients there also are struggling in delivering their top line growth because of the US and China. Overall macroeconomic environment.
Dipesh Mehta
Okay, is it possible to let’s say reconcile the vertical mix which you provided versus the three other bucket earlier which you used to report financial market digital and customer operation from the five vertical you provided. If you can provide some sense, I understand about let’s say digital might be into multiple bucket. So if you can provide some sense how one should understand those things.
Kapil Jain
Yeah sure. Yeah. Please go ahead Srini or offline if like if you please go ahead.
Srinivasan Nadadhur
So broadly the services that we do for investment banks which is client life cycle and trade life cycle which we used to call as financial markets that will be broadly speaking in bhsi. Again broadly the customer operation, the CX business services that we used to deliver that has the majority overlap in CMT but that may not remain for a long time because we are also now selling CX services outside of cmt. But historically that would be the mapping then the rest of the digital business you can think about as the combination of high tech, MND fashion and luxury retail emerging and so on.
Technology is across all five of this. I hope that gives you again digital also. Actually I should correct myself. Digital what we used to call digital is also present. Those services have also been provided to BFSI and to CMT vertical.
Dipesh Mehta
Understand. So digital is across and other thing I think you provided some sense. Thanks sir.
operator
Thank you R Hope all your questions answered. We have next question from the line of SIP Shah sa. Please go ahead.
Sandeep Shah
Thanks. Thanks for the opportunity again sir, in terms of your commentary on TCV entering FY26 about pipeline better versus what we had at the start of the year last year. Is it fair to assume then TCV growth can be similar versus what we have seen in FY25 and quarterly deal TCV can have a run rate of $50 million plus or minus or is it not because 50 million is much higher than the earlier quarter. So one should not extrapolate.
Kapil Jain
Like I said we are looking at building a franchise which will deliver value to our clients, shareholders and all stakeholders in medium to long term basis. In for full year we delivered ACV of $140 million. I said we will. We are optimistic to deliver a higher number on the ACV for the full year. Quarter on quarter they can be aberrations. So that’s really the comment I made and I’m repeating the same thing in terms of how we view our business and franchise.
Sandeep Shah
And just a question in terms of short term, most of your peers have spoken that the macro led uncertainty impacted demand starting from March, is it fair to assume 1Q we can have some headwind on the growth despite better pipeline and generally, if I’m not wrong, correct me if I’m wrong. 1Q is seasonally a soft quarter for us which can have an impact even this time because of the macro issue. So is it fair to assume that way or you believe because of the order book 1Q will also have a growth momentum similar to last few quarters?
Kapil Jain
I think we are cautiously optimistic for Q1 Q1 does see some headwinds because of the wage hikes and other things on the margin front. And I think that’s the visibility we have because of the overall, like you said, overall macroeconomic environment and the volatility that we are seeing.
Sandeep Shah
Thank you.
operator
Thank you, Sandeep. Reminder to all participants to click on raise hand buttons before we take next question. So we have next question from the line of Girish from Bob Capitals Girish, please go ahead.
Girish Pai
Okay. Am I audible?
operator
Yes,
Kapil Jain
yes.
Girish Pai
Okay. Just want to ask, did 4Q play out the way you anticipated or was it stronger or weaker or how did it play out before the beginning of the quarter you must have had certain expectations.
Kapil Jain
I think it was in line with our expectations Q4 in terms of how it played out.
Girish Pai
Okay,
Kapil Jain
the only thing I would say is the dollar rupee volatility was not something that was as you know, like from 8788 it went down to 84 85. That was the only element that sort of came as a surprise. But otherwise things were as what we had expected.
Girish Pai
Okay, my second question is regarding seasonality or 1h versus 2h or the four quarters, will they be the growth is going to be smooth across the various quarters or the two halves or could there be some seasonality in this?
Kapil Jain
So Girish, with the overall volatility in the market, the overall macroeconomic factors, the geopolitical uncertainty, there could be quarter on quarter aberrations that are hard to predict and Give a view on I think full year. We are confident on acv and like I said, a pipeline at the start of this year is higher than what it was at the start of last year.
Girish Pai
Okay. And the salary increase this year, will the quantum and the spread in terms of the number of people who kind of get the salary increase, is that going to be the same like what we had in FY25?
Kapil Jain
It’s around the same. But Srini, you want to comment on that?
Srinivasan Nadadhur
The increase is about the same but the number of people obviously more.
Girish Pai
Okay, my last question is around gccs. I mean everybody seems to have a GCC strategy. Anything that you would want to kind of spell out from your side?
Kapil Jain
Yeah. So Girish, as you would know, we, we have clients who have GCCs and we, it’s not either or we exist along with GCCs and they see us as a strong partner. So we are also looking at growing our GCC footprint and, and we are also looking to invest in that area by bringing in people in India who can solely focus on the gccs.
Girish Pai
And would your GCC revenue be like in the high, single digit to low teens kind of number or a higher number?
Kapil Jain
So Girish, we don’t, we report client revenues, not gcc. So they depending upon the vertical that we laid out, the five verticals SH spoke about, depending on which vertical the client falls in, it will fall in there.
Girish Pai
Okay, thank you,
Kapil Jain
thank you.
operator
Thank you. G, we have follow up question from line of me mano. He’s from Carnelian May, please go ahead.
Mihir Manohar
Yeah, thanks for giving the follow up. Just on the dealman side, I mean broadly wanted to get an understanding. This financial year there has been a very good growth in deal wins. I mean how has productized services helping us on the deal win side? Some use cases, I mean you know two or three problem solutions around that, you know what I mean? Some key solutions that we are delivering using the productized services that will be helpful.
Kapil Jain
Well like I said, compliance Manager, Market Intelligence, ROI for CMOs. So there are different set of use cases we can highlight and which are helping our clients to stay relevant. I had mentioned this in the initial few calls that we operate on both sides of the equation, helping clients on the revenue side in terms of how you are spending your marketing dollars, how you are running your campaigns, how you are enhancing your customer experience, removing friction points as well as on the traditional outsourcing which is on the cost side of the equation and on both the sides we have our IP that we use to deliver our services.
So I hope that answers your question in terms of the sort of deals that we are seeing and our strong delivery is also giving us the momentum in terms of our existing clients.
Mihir Manohar
Okay, sure. Understood. So it’s not that out of $140 million, some specific deals are coming from product services. It’s the case that across all the conversations, product and services is becoming an integral part of the conversation itself. Right?
Kapil Jain
Yeah. Because like see, it’s what we are trying to do is we are selling in orthogonal circles around technology consulting and ops. And that’s the unique combination we bring to our clients. So it’s not like you’re selling them them in a discrete manner.
Mihir Manohar
Understood?
Kapil Jain
Sure.
Mihir Manohar
Yeah, that’s it. From. I said thank you very much.
Kapil Jain
Thank you.
operator
Thank you. Me. We have next question from the line of Varun Ma, please go ahead. Yeah. Varun,
Kapil Jain
can you hear me now?
operator
Yes,
Kapil Jain
yes,
Kapil Jain
this is Varun from Bundan Life Insurance. So a couple of questions. Firstly, one of the focus areas for us was to make business more predictable. How do you see progress on that front and directionally how it is evolving?
Kapil Jain
So Varun, I think are we better off than where we were when last time when we had lost the client? The answer is yes. As you know, I think in last year or year when we had one of the clients that rolled off, we were able to rebound back much more quickly than we have done in the past.
So from that perspective, I think the predictability is increased. But as you know, this will take time for me to say that. Look, will, are we there where we need to be? Maybe not. But are we better off? The answer is absolutely yes.
Varun
Got it, Got it. And on the pricing perspective, incrementally the pricing, are we, are we still pricing at a pricing at some discount or lower rate to improve our win rate? Some thoughts on pricing would be helpful.
Kapil Jain
No, we are not seeing any like lower rate. We are competitive depending upon the deal, depending upon the market, depending upon the solution relevance.
So it’s difficult to comment on a deal by deal basis. Lower, higher. But we are competitive in the markets and geographies and the services that we operate in.
Varun
Okay. And lastly on capital allocation, would we continue with the buybacks or we’ll focus on distributing cash to dividend? Now given that there’s no difference between the two from taxation perspective.
Srinivasan Nadadhur
Yeah, we will take a decision on that later in the year. But you as you correctly note, there is no difference.
Varun
Got it. Thanks.
operator
Thank you, Arun. We have next question from the line of Vikas Kemani he’s from Carnelian Asset Management because. Please go ahead.
Vikas Khemani
Hi. Hi. Slightly more, I mean not from quarter perspective but more directionally. You know, basically you know your, your, you considered KPO but your margins are very much like in. So today’s the companies like data analytics and you know those kind of companies. So do you find overlap in some sort of your business mix somewhere with those companies, you know, likes of Latent or Factor or something or do you see any kind of overlap or cross? You know, how do you sort of. I mean I’m just trying to get direction of the business future. And secondly, how is it, you know, sort of use of a role of you know, AI is going to add or you know, create a opportunity or threat to your business? Those two broad questions.
Srinivasan Nadadhur
So I’ll take the first one. And yeah, we do come across pure play analytics companies once in a while, especially when we are pitching our analytics services. So technologies in the technology and analytics space also in, in and around Martech market intelligence. So there is some overlap of the services that we provide. But in that.
Vikas Khemani
Business would be in that sense currently for us. And how would that growth profile would be there in that right now about.
Srinivasan Nadadhur
20% is what it is. I think 18 or 20% is what what we report is. Analytics and automation I would say is broadly overlap.
Vikas Khemani
That’s where you will see a lot of. And is that a fast growing area.
Srinivasan Nadadhur
For us in this year? It has grown. The year before it was. I think it contracted a little bit.
Kapil Jain
Because Vikas, I think this is a discretionary spend but we have high focus on growing this area and we have made some investments also at the front end as well as at the back end on, on this area data analytics. So if the market continues and there is discretionary spend, I think we are optimistic that we will see growth. The second question that you asked that Gen AI, agentic AI do we see this as an opportunity or threat? I have in the previous calls also I have said that I see this as an opportunity because of productized services.
We are enhancing our product maturity and ingesting gen AI in all our products. We are not shying away from cannibalizing our revenue and passing on the benefits to the client as and when required. So I see this as an opportunity and not a threat as you see.
Vikas Khemani
Like you said that you are passing on benefit to the client. So let’s say if a client was using 100 rupees of services from you and that today you are delivering at 80, does that benefit come back to you in form of additional business either on data analytics or some other side is that also you’re seeing as a trend?
Kapil Jain
So because it’s like, that’s what I’m saying. We are looking and building a medium to long term franchise. It may not happen that 800 becoming 80 and in the same quarter 80 will become 110 or 90.
Vikas Khemani
Absolutely.
Kapil Jain
But over a medium to long term. Absolutely. If either not with that client but with some other client. Because you have a very good use case where you have said that you were delivering it for a hundred and you passed on the $20 benefit to the client. That’s the trust you’re building and building a medium to long term franchise. So absolutely, like I said, we don’t wherever required and it’s there. We will not shy away in cannibalizing our revenue and passing on the benefits. And there are different models depending upon who is investing in driving that efficiency, driving that productivity between the client and us and depending upon how do you do the gain share and so on and so forth.
Vikas Khemani
What explains to some of these leading, you know, you know, data analytics companies margin so poor vis, you know, yours any, any sort of perspective on that would you have? Because of course they have decent revenue but margins are like pathetic.
Kapil Jain
I think. I can’t comment. You should ask.
Vikas Khemani
No, no. I’m saying would you have some perspective on that? I’m. I’m not asking on like is that, I mean I, I don’t know. I’m just trying because you also are building that business and you are then profitable. Right. You deliver the margins which are like exceptionally good. Better than some IT companies.
Kapil Jain
Right. Thank you Vikas. And which is what I am saying that everything we do we try and leverage technology to amplify human potential and they are not discrete. Our ability to blend IT and, and deliver services to the client is, is where we differentiate ourselves.
Vikas Khemani
You, you know, you referred you know, products in your business. So is that I high operating leverage kind of products do you have for which you use for delivering to a client? I mean what kind of. Could you give some ideas around that, some thoughts around that?
Kapil Jain
So we are not in a, we are not a, we are not a products company. So it’s not. We are selling our products as SaaS.
Vikas Khemani
Yes.
Kapil Jain
But I think our ability like compliance manager in the area of regulatory and compliance clients market 360 for competitive intelligence. These are some of the products that helps us differentiate and provide compelling value proposition to our clients. And that’s really what we are doing in Terms of a taking our value proposition use cases to our clients and that’s really what is making us stay relevant.
Vikas Khemani
When you have those kind of platforms or whatever as you call you replicate to other clients. But that would give you a bit of a advantage in getting a customer. But would that also better margin profile? I mean does that give any operating leverage in some sense?
Kapil Jain
Absolutely. See like I said on the pricing side we are competitive in the industry we operate in. The operating leverage comes in from our ability to bring technology in everything and whatever we are doing. Got it. Thanks. Thank you. Thanks.
operator
Thank you Vikas. We have next question from the line of Sandeep Shah. Sandeep, please go ahead.
Sandeep Shah
Yeah, thanks. Thanks for the opportunity again. So just a strategic question. What percentage of our revenue would be voice centric or and what percentage within voice centric business where we have migrated from a traditional way of delivering voice related delivery versus new way of delivering the same through automation. And do you expect this contribution to go up or go down in the next two to three years?
Kapil Jain
I think as we will grow like in terms of percentage it it’s like in terms of it’s difficult to predict where it will go. But we see relevance in our existing clients both on voice and chat and also clients experimenting with us on technology or the new way voice is getting delivered. So we are part and parcel of where clients are doing some of these experiments. And because of the trust that we have built on the back of our strong delivery, as I said in the opening remarks with one of the large CMD clients, we won a trusted partner of the year and we won four other awards.
So that’s really what is helping us on our care programs, on the voice chat and our ability to give insights from voice chat and the data that we have access to.
Sandeep Shah
Okay. So Srini sir, in earlier quarters you have described Voice centric being 6 to 7% of the top line. Do you believe that concentration is more or less there only or it has come down or gone up to be.
Srinivasan Nadadhur
About that it should be part of CMT business. So yeah, I think that’s about fair.
Sandeep Shah
So 6, 7% of the total business.
Srinivasan Nadadhur
Yeah.
Sandeep Shah
Okay. Okay. And last related question, Kapil. Sir, with that 6, 7% do you see a risk of cannibalization more in that piece of business versus the more 90, 95% of the business which is non knowing?
Kapil Jain
I don’t Sandeep. I don’t see cannibalization. Like I said, if their clients are leveraging technology, we are in the mix of what Clients are doing. So I don’t anticipate at an like with one client there may be some shrinkage because of technology or because of new way of doing. But overall, at a portfolio level, I don’t see it getting cannibalized because the market I think on the voice as well as on chat is big enough.
Sandeep Shah
So thanks all.
Kapil Jain
Thanks, Sandeep.
operator
Thank you, Sandeep. We have follow up question from the line of D. Please go ahead.
Girish Pai
Yeah, Am I audible?
operator
Yes.
Kapil Jain
Yes.
Girish Pai
Okay. Just wanted to understand how much Is a discretionary versus non discretionary part of your business?
Srinivasan Nadadhur
70 is non discretionary. 30 is discretionary.
Girish Pai
Okay. I’m also curious about your setting up delivery centers in Lima and in Cairo. What drove this decision to you to set it up in a Latin American country and in Africa? Was it decided by demand and how will margins pan out when we deliver from these particular centers?
Kapil Jain
Girish? It was a combination of client demand as well as overall attractiveness of the location. Right. In terms of it’s not like we have set up a greenfield facility and then waiting for the client to come. So it was on the back of client. And then we assess overall supply, demand situation, overall attractiveness of the location and basis that we make a decision. Like I said in the beginning, yes, in short term there would be margin pressures as we have opened up new centers. Any new center will take time to deliver profitable growth. And which is why the range that we have given is what we have given.
And we are not narrowing the band between 24 to 28%.
Girish Pai
No. But at a mature stage, would the margins from these delivery centers be lower than that from India?
Kapil Jain
Yeah, it may be lower, but at a portfolio level we’ll be able to balance the portfolio mix.
Girish Pai
Okay. And just from the on site, offshore mix perspective, I think we had shifted more towards on site over a period of time. Is that trend going to continue?
Srinivasan Nadadhur
I’ll take that.
Kapil Jain
Yeah, sure.
Srinivasan Nadadhur
So I think if you’re talking about from a longer term perspective, like the last seven, eight years. Yes, then yes, I think it has moved from 10 to 20. In the more shorter term, it is sort of between 19 and 21% and we don’t expect any significant movement from this figure of around 20%.
Girish Pai
Okay, fine. Thank you.
operator
Thank you, Girish. As there are no questions, I will hand over the floor to management for. Closing remark,
Kapil Jain
I think. Thank you everyone and once again I think we are very excited and thank you for the support and confidence that you have laid in us. And it’s exciting times as we are celebrating our 25th year, and thank you all for your support. Thank you. Thanks.
operator
Thank you, everyone.