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Domain expertise drives deeper client relationships

We attended eClerx’s Analyst Day, where management expressed greater confidence in the BPM space and its relevance in the evolving AI landscape. Against this backdrop, management has set an aspirational goal of doubling its revenue to USD 1bn. It believes eClerx is well positioned, with strong capabilities across Data, Technology and Domain, to capture a higher wallet share from its existing Fortune-500 client base, while also building the foundation to gain access to the small and mid-market segments. ~85% of its revenues are repeatable in nature and are derived largely through client references. The focus is on deepening these client relationships, taking greater ownership and accountability for business outcomes, while infusing AI into business processes. Commercial deal constructs are also shifting from people-led to operational-led or outcome-led models, with the two large deal wins further validating eClerx’s ability to participate in such engagements. Management indicated that it may prioritize growth over margins in the near term and pursue low-margin strategic programs, while broadly maintaining EBITDA margins within the guided band (24-28%). Reusable AI agents, tools and products are driving internal efficiencies, complementing its ability to operate within the targeted margin band.

Medium term growth & margin aspiration:

Management aspires to deliver higher than peers’ growth in the medium term to become a USD 1bn company, supported by productized services driving customer engagement, deep domain knowledge across value chain, and maintaining delivery excellence while maintaining EBITDA margin between 24%-28%.

Investment strategy:

Management remains focused on acquisitions that would bring additional value or verticals/segments to its capabilities, which can further enable crosssell opportunities. The company plans to invest ~1% of revenues in strengthening its sales team and setting up global sales, ~1% of revenues in strengthening capabilities, and ~1.5% of revenues in geographic expansion

Growing market opportunities:

Management highlighted sizeable opportunities across its focus areas, including a USD 4bn Capital markets BPM market size growing at a stable single-digit rate, a USD 56bn CMO market forecasted to grow at 10% CAGR to 2030, a USD 70.2bn global F&A BPO market which is projected to reach USD 142.7bn by 2033, & a USD 120bn CXM market. The company plans to capture these opportunities by improving wallet share & cross selling within existing marquee accounts and adding new logos through deep domain knowledge.

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