eClerx Services Ltd Management Discussions

I. INDUSTRY OVERVIEW

In the face of changing global economic conditions and evolving market trends, according to Nasscom the financial year 2025 proved to be a period of strategic strength for Indias technology sector, with multiple segments contributing to its expansion. Nasscoms Annual Strategic Review 2025 outlined the key developments of FY2025 and provided insights into the outlook for FY2026. The sector experienced a growth rate of 5.1%, generating an additional $13.8 billion in revenue and pushing the total industry revenue beyond $282.6 billion for the year. Export revenues now show a balanced contribution between international multinational corporations (including global capability centres) and domestic service providers.

Despite ongoing global challenges and significant transformations driven by artificial intelligence, the technology industry maintained its role as a net job creator, adding 126,000 new positions and bringing the total workforce to approximately 5.8 million employees by the end of FY2025.

Nasscoms Tech Industry CEO Survey of technology industry leaders indicates a rising confidence among CEOs despite external pressures. Around 77% expect their businesses to grow, while 85% anticipate client technology budgets to remain stable or increase in FY2026 compared to the previous year. Importantly, nearly two-thirds of these executives foresee that investments in AI will constitute over 10% of their overall technology expenditures in the coming fiscal year.

II. BUSINESS PERFORMANCE

Driving Growth Through "One eClerx"

FY25 was a pivotal year for eClerx, marked by the successful implementation of our "One eClerx" initiative. This strategic shift, unifying our approach across the organization, significantly enhanced our ability to cross-sell and secure large, impactful deals, bolstering our pipeline considerably.

We invested heavily in our client-facing teams, equipping them with comprehensive training to effectively sell our diverse service lines across their entire client portfolios. Furthermore, we brought together our pre-sales and solutioning functions across verticals. This integration allowed us to drive larger, cross-vertical deals, foster the development of new capabilities, and deliver sharper, more focused solutions to our clients. Our increased engagement with industry analysts and advisors also paid off, with eClerx being recognized as a major contender in three of our key service offerings.

Financial Markets

The BFSI team are pleased to report a year of strong business performance, marked by strategic growth and consistent operational excellence. Our Fayetteville Center of Excellence for Financial Crime and Compliance delivered exceptional results in its first full year, emerging as a key differentiator and an area of increasing client interest. Gross sales across our core client portfolio were strong, driven by disciplined execution and high-quality delivery from our India and Manila teams. We also cultivated new growth opportunities, particularly in our client lifecycle business, where early-stage engagements are expected to mature in the coming year. In parallel, we made deliberate investments to strengthen our pipeline, positioning the company for sustained growth. These results reflect our clear strategy, our ability to deliver at scale, and our continued commitment to generating long-term value for clients.

Digital

Our Digital clients experienced a slower start to the year than anticipated but witnessed a stronger performance in the second half with increased budget approvals across all sectors.

The high technology sector demonstrated stronger demand due to the growing need for GenAI-related services and overall sector buoyancy. Conversely, the fashion and luxury industry sector saw a year-on-year decline this fiscal year following several years of robust growth. Despite this downturn, we observe strong interest in our new Paris and Milan studio offerings and next-generation 3D product experiences. Client demand was notable in the Industrial and Manufacturing sector as they embraced more digital services and investments in product data and digital shelf analytics services. The digital divisions of our BFSI clients allocated more investment towards their digital channels and focused on ROI for their marketing technology investments.

Customer Operations

Over the past year, we delivered exceptional growth and performance, marking one of the most successful years in Customer Operations. Our revenue growth was fueled by our ability to drive measurable outcomes and efficiencies for our clients, reinforcing our position as a trusted strategic partner. We continued to lead with thought leadership and deep institutional knowledge, helping our clients transform customer experience, enhance satisfaction, and drive stronger loyalty across their customer bases. Our efforts consistently translated into improved sales performance and retention outcomes for the clients we serve.

We were proud to be recognized by one of our top clients as their Partner of the Year, in addition to receiving multiple Most Valuable Partner awards across several of their business units - recognition that is especially meaningful given the highly competitive landscape in the BPO industry. The exceptional delivery to this client resulted in 25% year-over-year growth in FTEs, reflecting the trust and value we continue to build in this strategic relationship.

This year also saw our team provide critical support to the live streaming sector, successfully enabling numerous large-scale live events with seamless operational execution. In terms of global expansion, we made significant strides by opening new delivery centers in Peru and Cairo, strengthening our global footprint and expanding our multilingual, multicultural capabilities.

We achieved multiple large cross-sell wins and brought on several new clients, a testament to the power of "One eClerx" - our ability to bring integrated solutions across teams, functions, and geographies to deliver comprehensive value for our clients.

We are proud of the progress weve made in FY25 and are energized for what lies ahead.

Technology absorption and Research and Development Centre

We continue to invest in developing technology solutions that increase our ability to add value across the breadth of our services. Our Technology Centre of Excellence is designed to help us keep pace with the evolving technology landscape and integrate advanced technologies such as Generative AI and Data Engineering into our products and services.

We continue to invest in domain-specific applications to enhance the value we deliver to our clients. Building on our Generative AI stack and context-specific accelerators, we are now focusing on incorporating Agentic AI based automation into our delivery. In addition to embedding Agentic AI into our products and solutions, we collaborate with our clients to implement these solutions within their environments. We have invested in aligning our AI

System Management Practices with ISO/IEC 42001 standards.

Over the past two years, we have published four papers in journals, including IEEE Approved journals such as International Workshop on AI and Image Processing, International Conference on Computers in Management and Business, International Conference on Computer and Communication Systems, International Conference on Data Intelligence and Cognitive Informatics. Our strategic products, Compliance Manager, Market360, are expanding to cover upstream and downstream business processes, aiming to foster stronger client relationships. Our solutions have been recognized in forums and publications, including G2, Globee Awards for Technology, Stevie Awards, Excellence in Customer Service Awards, Martech Awards, and E-Commerce Germany Awards. Some of our products and product-led BPaaS offerings have been featured on Everest Peak Matrix.

We are collaborating with IIT Delhis Technology Innovation Hub (IHFC) on joint research and development initiatives, participating in industry forums like NASSCOM to share experiences and learn from peer firms, and engaging in mentorship from academic and industry thought leaders.

Infrastructure

We continue to invest and continuously upgrade our perimeter and internal security infrastructure so that we can support the growing headcount in the ongoing hybrid delivery model. As of March 2025, our offshore facilities have a capacity of around 14,700 seats in India, USA, Philippines, Egypt, and Peru.

We continue to invest in newer technologies & optimize usage of existing tool to improve our security posture, which will include rollout of IAM (Identity and Access Management) for mid management and senior management employees providing round the clock monitoring of account usage and further optimization of PAM, SIEM, Email Security solution ensuring prompt detection and remediation.

Today, the Company runs a Secure Anywhere Anytime (SAA) model which complies with our MSA commitments and gives employees a flexibility to switch from Work from Office to Work from Home.

Harnessing Talent

Our people are our greatest competitive advantage, and investing in their growth, wellbeing, and connection is central to our success. This year, we continued to prioritize initiatives that empower our workforce and build a culture of learning, belonging, and excellence.

We launched a Gen AI training program, developed in partnership with the Technical University of Munich (TUM), one of the worlds top-ranked computer science institutions. We called it the "Skill of the Year," and for good reason. Over 8,000 of our employees completed the course, and 6,400+ were certified by TUM – a remarkable response that reflects both enthusiasm and readiness across the organization.

Our ‘Communities initiatives scaled new heights as 11,000+ employees were engaged across sites – the initiatives brought employees together around shared passions and interests, fostering connection and camaraderie beyond the workplace. Whether it was sports, health and fitness, travel, women, CSR and ESG initiatives, or the arts, these vibrant groups created spaces where colleagues engaged, inspired, and supported each other – and cultivated a culture of belonging, collaboration, and holistic growth.

We integrated HR platforms with our processes to significantly improve the experience for our global workforce through enhanced synergies. This integration streamlined operations and fostered greater efficiency across all levels of our organization, enabling accurate and real-time reporting and insights.

Employee wellbeing was a key focus area, with initiatives addressing mental and physical wellness, such as on-site health camps, 24 x 7 medical assistance, and counselling support, all of which were highly appreciated by our employees. We also placed emphasis on celebrating employee milestones, beginning with parenting, and introduced recognition to honour important life events.

III. OUTLOOK

Financial Markets

We enter the new year with strong momentum, building on strong gross sales performance and a solid foundation of delivery excellence. Our sharpened focus on the client lifecycle segment is already yielding results, with several significant opportunities moving into the pipeline. To capitalize on this growth, we are doubling down on our investment in this area - enhancing the structure of the team and moving key talent to support an end-to-end suite of offerings, including critical technological components that will elevate our value proposition. Our Trade Lifecycle practice also delivered a successful year, expanding within existing accounts and opening doors to new client relationships. Encouragingly, we are seeing increased cross-industry traction: client lifecycle solutions are gaining interest beyond our traditional base, while BFSI clients are engaging more deeply around client experience and digital initiatives. These trends signal a year of continued growth and diversification, supported by targeted investments and a clear strategic direction.

Digital

Looking ahead to FY26, we anticipate increased demand and larger deals for our marketing and digital shelf offerings. Our AI-driven capabilities provide a competitive edge by optimizing marketing campaigns, streamlining product lifecycle management and compliance, and delivering real-time insights for better decision-making.

We are particularly optimistic about growth in key sectors:

? The high technology sector is seeing a rise in marketing operations focus.

? The Financial Services industry is prioritizing digital transformation, with high demand for our Martech enablement expertise, especially Adobe and Salesforce.

? Retail, Manufacturing, and CPG sectors require data engineering, competitive intelligence, and real-time cross-channel insights.

Additionally, there is widespread demand for support across Ad Tech platforms, including essential creative optimization.

Customer Operations

As we look ahead to the coming year, we will continue to align efforts under our One eClerx strategy, a unified approach designed to feature the full breadth of our capabilities and services across the organization. This initiative will serve as a foundation for deepening client engagement, strengthening brand positioning, and driving cross-functional value.

Client Growth and Diversification remain key priorities. We are committed to expanding our client portfolio by entering new markets and verticals, while also unlocking cross-sell opportunities across our existing client base. By leveraging our deep domain expertise and integrated service offerings, we aim to deliver more comprehensive and impactful solutions to our clients.

In collaboration with our Technology team, we are enhancing our service suite to include new offerings such as Network Operations Center (NOC) and Infrastructure Support, responding to the growing demand for resilient and scalable IT operations.

Furthermore, we are excited to launch multiple new engagements featuring QA360, our advanced GenAI-powered Interaction Analysis solution. QA360 enables the automated evaluation of Customer-Agent interactions based on predefined KPIs, significantly improving both the speed and consistency of quality assessments and delivering measurable improvements in customer experience and operational efficiency.

Overall, FY 2026 will be a year of strategic expansion, innovation, and deepened collaboration across teams and clients—positioning eClerx to deliver even greater value at scale.

IV. OPPORTUNITIES, THREATS, RISK AND CONCERNS

Risk management is a fundamental aspect of the business. This document outlines the primary risks and uncertainties that could negatively affect the Companys operations, financial performance, managerial effectiveness, and overall sustainability.

The Company has implemented an effective Risk Management system to identify and address various potential risks. This system ensures that the Company has a robust framework for identifying, measuring, evaluating, and mitigating different risks. The Risk Management system operates under the guidance of the Risk Management Policy and is overseen by the Risk Management Committee. While this document focuses on potential adverse outcomes, it is important to note that some of these risks could also present opportunities if the results are favorable. These risks include, but are not limited to:

Macro-economic risk	In FY 2024-25, 92% of the Companys revenues originated from the United States and Western Europe. Factors such as inflation, high interest rates, supply chain disruptions, government policies, and geopolitical risks may impact our clients or our capability to serve them profitably, which could result in losses in key projects or customers.
Concentration risk	During FY 2024-25, 63% of the Companys revenue came from its top ten clients. Despite reducing reliance on the top 10 clients over the years, concentration risk remains significant. Any negative developments affecting these clients, such as loss of business or changes in their financial health, could impact on our performance. Additionally, mergers or acquisitions involving these clients could alter their outsourcing strategy and limit our business.
Currency risk	The Company earned 86% of its revenue in US Dollars, 9% in Euros, and 5% in Sterling and other currencies. Exchange rate fluctuations can negatively impact financial performance. Though the Company uses strategies like hedging to manage currency risk, investors should consider these risks when evaluating the Companys outlook.
Competition risk	The Company operates in a dynamic market environment where competition is prevalent and can intensify. New entrants may emerge, and existing competitors may enhance their strategies or introduce innovative technologies. These competitive dynamics could impact market position, business operations, and financial performance.
Integration risks	The Companys past or future acquisitions may pose challenges including financial, technological and people integration risks. Issues such as technological compatibility or operational disruptions may arise during integration. We could also end up with higher liabilities as part of acquisitions. These risks could potentially impact project timelines, client relationships, and financial performance.
Key People risk	Our business is critically dependent on the quality of our workforce. Failure to attract, retain and motivate key employees would impair the Companys ability to offer the right quality of service to clients.
Technological risk	With advancement of technology, artificial intelligence and robotics, the work volume for people-skill driven services might decrease or reshape significantly, and the Company might not be able to make transition to newer client demands or newer supply side models quickly.
Business disruption due to IT system failure risk	Business disruption following a major outage event or a failure of our IT systems could cause a disruption in the Companys services, thereby reducing client confidence.
Business disruption due to pandemic	Business disruption due to pandemic resulting in lockdowns, travel restrictions in specific regions or large absenteeism due to widespread infections could impact financial performance if our clients do not extend work from home approvals or decide to shift business to their own or competitor facilities that are still functional.
Legal and regulatory risk	Failure to comply with legal or regulatory requirements could impact Companys reputation and financial position. Legislation in certain countries in which we operate may restrict clients in those countries from outsourcing work to overseas entities like us, which could hamper our growth prospects in major markets. Any major export or tax incentive, if withdrawn or materially altered may have an adverse implication on our financials. Insurers are lately excluding coverage of emerging risks thereby exposing Company to bear costs of lawsuits.
Personal data and Privacy Risk	There is increased sensitivity on the part of governments and regulators with respect to personal data and privacy. Legislation like GDPR in Europe carry severe consequences for non-compliance or breach. Failure to comply with current and/ or new regulations or inadequacy of privacy policies and procedures could result in substantive liabilities, penalties and reputational impact.
Risks from Work from home scenarios	Work from home scenarios could expose the company to additional risks related to security of network, data and endpoint devices and new employee health hazards. Any adverse event on this front could expose the company to reputational and financial risks. There could also be frequent power or internet disruptions at home without adequate redundancy, increasing the risk of missing client deliverables and SLAs, which could impact client business decisions vis-?-vis eClerx.
Business disruption due to Cyber Security	Business disruption following a Cyber security incident or targeted cyber-attack may render network, servers, storage and endpoints non-functional OR partially functional.
Incident OR Cyber Attack	A cyber-attack denying an organization access to its electronic systems can cause major disruption, with potentially serious financial and reputational consequences. Following a data breach, an organization can also suffer loss of production, sales and customers as networks and websites are taken offline and repaired; thereby reducing client confidence and organization may be subject to litigations.
	While the organization has beefed up security processes and have made significant investment in security technologies at network, server infrastructure and end-point level, any cyber incidents emanating due to inherent vulnerabilities, advanced ransomware, unknown/zero-day exploits, targeted attacks, disgruntled employee, etc. may bypass cyber security defences causing a disruption in the Companys services, thereby reducing client confidence.

V. INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY

The Company has established a robust Internal Controls system that is tailored to the specific needs and scale of its business operations. This system is carefully crafted to ensure the accuracy and reliability of financial and operational records, enabling the preparation of accurate financial statements and ensuring proper asset accountability. The Company has a strong and independent internal audit function which carries out regular internal audits to test the design, operations, adequacy and effectiveness of its internal control processes and also to suggest improvements and upgrades to the management. The Audit Committee reviews the adequacy and effectiveness of the Companys internal control environment and monitors the implementation of the recommendations.

VI. CONSOLIDATED FINANCIAL PERFORMANCE

The financial statements of your Company are prepared in compliance with the Companies Act, 2013 and Indian Accounting Standards (‘IndAS). The Groups consolidated financial statements have been prepared in accordance with the principles and procedures for the preparation and presentation of consolidated accounts as set out in the IndAS 110 on ‘Consolidated Financial Statements.

The following discussion and analysis should be read together with the consolidated IndAS financial statements of the Company for the financial year ended March 31, 2025.

i. RESULTS OF OPERATIONS

The following table gives an overview of consolidated financial results of the Company:

(Rupees in Million)

			(Rupees in Million)
Particulars	2024-25	%	2023-24	%
Revenue from Operations	33,658.65	97.49	29,255.43	97.81
Other Income (net)	865.27	2.51	656.35	2.19
Total Revenue	34,523.92	100.00	29,911.78	100.00
Employee benefits expense	20,657.84	59.84	17,383.93	58.12
Cost of technical sub-contractors	814.03	2.36	658.09	2.20
Other expenses	4,105.91	11.89	3,465.49	11.59
Total Operating Expenses	25,577.78	74.09	21,507.51	71.91
EBITDA	8,946.14	25.91	8,404.27	28.10
Finance Costs	348.90	1.01	234.84	0.79
Depreciation and goodwill amortization	1,411.93	4.09	1,257.72	4.20
Profit before exceptional item and tax	7,185.31	20.81	6,911.71	23.11
Exceptional item	-	-	(18.35)	(0.06)
Profit before tax	7,185.31	20.81	6,893.36	23.05
Taxes	1,772.72	5.13	1,776.05	5.94
Minority Interest	1.67	0.00	2.75	0.01
Net Profit attributable to shareholders	5,410.92	15.67	5114.56	17.10

a. Income

Income from operations

Income from operations increased to Rs. 33,658.65 million in the year under review from Rs. 29,255.43 million in the previous year registering a growth of 15.05%.

Other income

Other income primarily comprises of foreign exchange gains, interest on bank deposits and income from debt oriented mutual funds. The total other income increased to Rs. 865.27 million in the year under review from Rs. 656.35 million in the previous year.

There was a Foreign exchange gain of Rs. 77.23 million due to revaluation and realisation of foreign currency denominated assets and liabilities in the year under review compared to gain of Rs. 21.73 million in the previous year. The gain has been accounted in other Income.

Income from investments Increased to Rs. 553.12 million in the year under review from Rs. 372.54 million in the previous year primarily due to higher yields on investments and bank deposits.

b. Expenditure

Operating expenses comprises of employee costs, cost of technical subcontractors and other general and administrative expenses. The total operating expenses increased to Rs. 25,577.78 million in the year under review from Rs. 21,507.51 million in the previous year.

Employee costs increased to Rs. 20,657.84 million in the year under review from Rs. 17,383.93 million in the previous year, primarily due to increase in head count, annual increment in salaries and higher sales linked incentives.

Other expenses increased to Rs. 4,105.91 million in the year under review from Rs. 3,465.49 million in the previous year. The Increase was primarily due to:

— Increase in rent by Rs. 125.14 million, employee conveyance costs by Rs. 47.80 million, security and electricity expenses by Rs. 53.50 million, computer consumables and subscriptions by Rs.142.64 million due to increase in operations as compared to previous year.

— Legal professional fees increase by Rs. 94.72 million during the year.

— Increase in travel expenses by Rs. 49.09 million.

— Loss on fair valuation of current investment of Rs. 129.44.

c. Depreciation

Depreciation charge has increased to Rs. 1,411.93 million in the year under review from Rs. 1,257.72 million. The depreciation on right of-use asset increased to Rs. 518.57 million from Rs. 455.58 million on account of addition of new leased facilities in India and oversea locations. Depreciation on tangible and intangible assets increased to Rs 893.36 million from Rs. 802.14 million in previous year primarily due to higher capital investment in computer equipment.

d. Finance cost

Finance cost primarily on ROU assets has increased to Rs. 348.90 million in the year from Rs. 234.84 million in the previous year on account of addition of new leased facilities in India and oversea locations.

e. Income Tax Expense

The Companys consolidated tax expense (including deferred taxes) decreased marginally to Rs. 1,772.72 million in the year under review from Rs. 1,776.05 million in the previous year.

ii. FINANCIAL CONDITION

a. Share Capital

The Company has authorised capital of Rs. 1000.00 million as on March 31, 2025. The issued, subscribed and paid up capital was Rs. 469.60 million of equity shares of Rs. 10 each in the year under review as compared to Rs. 482.32 million in the previous year. The reduction in paid up capital was primarily due to buyback of 1.375 million shares carried out by the company during the year combined with sale/ purchase of shares by eClerx Employee Welfare Trust which is eliminated from the share capital of the Company.

b. Other Equity

Other equity of the Company increased to Rs. 22,588.02 million in the year under review from Rs. 21,992.69 million in the previous year. Increase in other equity is primarily on account of:

— Addition of retained earnings and other comprehensive income by Rs. 5,369.46 million in the year under review.

— Reduction in retained earnings on account of payment of dividend Rs. 46.95 million.

— Reduction in retained earnings on account of buyback of 1.375 million shares and buyback related expenses amounting including buyback tax to Rs. 4,726.06 million.

— Decrease of Rs. 124.54 million in hedging reserve on account of negative movement in cash-flow hedges.

— Increase in foreign currency translation reserve from translation gains on assets of overseas subsidiaries by Rs. 275.09 million.

c. Right of Use Lease liabilities

Long term ROU lease Liabilities were Rs. 3,080.62 million as on March 31, 2025 (March 31, 2024 : Rs. 2,248.31 million) and short term ROU lease Liabilities were Rs. 500.65 million (March 31, 2024 : Rs. 409.09 million). The increase was atributed to addition of new leased facilities in India and overseas locations.

d. Derivative instruments

The Company covers foreign exchange fluctuation risk through hedging instruments as per board approved policy. Derivative instrument fair valuation is accounted through Other Comprehensive Income. As at March 31, 2025 derivative instrument fair valuation asset and liability was Rs. 61.14 million and Rs. 115.67 million compared to fair valuation asset and liability of Rs. 127.78 million and Rs. 15.89 million respectively as at March 31, 2024.

The increase in net liability of Rs. 54.53 million as on March 31, 2025 as compared to net asset of Rs. 112.19 million as on March 31, 2024 is due to unfavorable marked to market movement against the hedged currency rates.

e. Borrowings

There are no borrowings by the Company or its subsidiaries in the years under review.

f. Employee Benefit Obligations

Employee Benefit Obligations which includes gratuity, leave encashment, sales incentives and other employee benefits, increased to Rs. 2,674.89 million in the year under review from Rs. 2,306.59 million in previous year primarily due to increase in head count, higher sales incentives and additional employee retention bonus plans.

g. Trade Payables

Increase in trade payables to Rs. 785.74 million in the year under review from Rs. 755.40 million in the previous year primarily due to increase in operations.

h. Other financial and current liabilities

Other financial and current liabilities include accrued salary expense, payable to employees on exercise of options, unpaid dividend, advance billing, contract liabilities, statutory dues and other payables, which have increased to Rs. 893.78 million in the year under review from Rs. 707.09 million in the previous year primarily on account of increase in accrued salary expense by Rs. 54.05 million, statutory dues by Rs. 79.30 million and Contract liabilities by Rs. 50.53 million.

i. Property, plant and equipment, intangible assets and capital work-in-progress

The net block of property, plant and equipment, intangible assets and capital work-in-progress and other as at March 31, 2025 was Rs. 2,409.31 million as compared to Rs. 2,096.53 million as at March 31, 2024. During year under review, addition to gross block (net off disposals) was Rs. 980.95 million comprising of computer hardware and software, office equipment and addition to leasehold improvements.

Goodwill on consolidation on account of foreign subsidiaries was at Rs. 4,079.04 million as at March 31, 2025 as compared to Rs. 3,993.44 million as at March 31, 2024. The movement is on account of translation of foreign currency goodwill in subsidiaries to INR.

j. Right of Use Assets

ROU Assets as on March 31, 2025 is Rs. 3,252.73 million as compared to Rs. 2,420.36 million as on March 31, 2024. The increase was atributed to addition of new leased facilities in India and overseas locations.

k. Investment

Investment represent Non-Current investment of Rs. 219.15 million as at March 31, 2025 as compared to Rs. 140.76 million as on March 31, 2024.

Current Investment represent surplus funds of the Company parked with mutual fund schemes that can be recalled at very short notice and investment in government securities.

The Companys treasury practices call for investing only in highly rated debt oriented mutual funds. Investment in mutual funds decreased to Rs. 1,921.81 million during the year under review from Rs. 2,021.11 million in the previous year, further investments in government securities decreased to Rs. 1,104.73 million from Rs. 1,991.53 in the previous year. The total decrease in investments is mainly on account of buyback of shares made by the Company during the current year.

l. Trade Receivables

Debtors increased to Rs 7,898.84 million as at March 31, 2025 from Rs. 7,029.00 million as at March 31, 2024. These debts are considered good and realisable and provision for doubtful debts has been made based on expected credit loss model based on various factors, including collectability of specific dues, economic condition of the industry in which the customer operates and general economic factors that could affect the customers ability to settle. The Company monitors trade receivables closely.

m. Cash and Other Bank Balances

Cash and other bank balances mainly represent bank balances in current and fixed deposit accounts due to increase in short term deposits placed with the banks. The cash and other bank balances increased to Rs. 7,391.27 million as on March 31, 2025 from Rs. 6,920.93 million as at March 31, 2024.

n. Other financial assets

Other financial assets include premises and other deposits, recoverable expenses and other loans & advances. Other financial assets increased as at March 31, 2025 to Rs. 1,068.31 million from Rs. 755.55 million as at March 31, 2024.

o. Other current and non-current assets

Other current and non-current assets include capital advances and GST credits, duty benefit credits, prepaid expenses and other advances. Other current & non-current asset increased as at March 31, 2025 to Rs. 1,309.11 million from Rs. 911.62 million as at March 31, 2024.

p. Deferred Tax assets/liabilities

Deferred tax assets and liabilities represent timing differences in the financial and tax books arising from depreciation of property, plant and equipment, compensated absences and gratuity and derivative financial instruments. The Company assesses the likelihood that the deferred tax will be adjusted from future taxable income before carrying it as an asset or liability. The Company has a net deferred tax asset of Rs. 659.40 million as at March 31, 2025 as compared to Rs. 495.46 million as at March 31, 2024.

q. Income Tax assets / liabilities

The Companys profits are subject to tax in the various jurisdictions where the Group conducts business operations. The non-current tax assets primarily represent payments of tax demands which have been contested and under appeals and refunds receivable. Current tax labilities primarily comprise of tax provisions made in end of the year for which payment is not yet due.

Income tax liability (net) decreased to Rs. 90.49 million in the current year from Rs. 118.03 million assets in the previous year.

iii. CASH FLOWS

The Companys cash flows from operating, investing and financing activities, as reflected in the consolidated statement of cash flow, is summarised in the table below.

Summary of cash flow statement:

	(Rupees in Million)
Particulars	2024-25	2023-24
Net cash generated by/ (used in)
Operating activities	6,546.17	5,258.92
Investing activities	1,305.04	(4,878.79)
Financing activities	(6,096.04)	(1,065.06)
Effect of Exchange fluctuation on Cash and Cash Equivalents	122.26	44.40
Net (decrease)/increase in	1,877.43	(640.53)
cash and cash equivalents
Cash and cash equivalents at the beginning of the year	3,539.54	4,180.07
Cash and cash equivalents at the end of the year	5,416.97	3,539.54

Cash flow from operations improved due to increase in profit from operation and reduction in net working capital in current year compared to previous year.

The Company had net sale of investments and bank deposits in the current year as compared to previous year.

Cash used in financing activities in Current year is higher primarily on account of buyback of Companys shares as compared to previous year.

iv. KEY FINANCIAL RATIOS (BASED ON CONSOLIDATED FINANCIALS)

In accordance with the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Company is required to give details of significant changes (change of 25% or more as compared to the immediately previous financial year) in key sector-specific financial ratios.

Ratios	2024-25	2023-24	Change %
Market capitalisation to revenues (INR)	3.91	3.97	-1.51%
Price / Earnings (times)	24.17	22.30	8.36%
Days sales outstanding	79.14	83.45	-5.16%
Liquid cash as a % of total assets	32.62%	37.19%	-12.28%
Current Ratio (times)	4.56	5.32	-14.38%
Revenue growth	15.05%	10.49%	43.54%
Operating Profit Margin	18.78%	21.32%	-11.92%
Net Profit Margin	16.08%	17.49%	-8.07%
Return on net worth	23.45%	22.75%	3.09%
Diluted EPS (INR)	112.07	104.38	7.37%

Revenue growth for the current year is higher as compared to last year on account of increase in the rate of addition of new customers and business as compared to last year. Movements in the other ratios are not greater than 25% and have remained relatively stable.

VII. MATERIAL DEVELOPMENTS IN HUMAN RESOURCES/ INDUSTRIAL RELATIONS

The realm of talent acquisition has undergone a complete transformation in a post-pandemic world. We have adapted, employing a wide array of innovative hiring strategies and harnessing the power of automation and analytics to zero in on the finest calibre of candidates and expedite the hiring process across all sectors of our operation. We reimagined application and on-boarding processes into a single, holistic experience – one that integrates talent branding, recruiting, and on-boarding.

To bridge the skills gap, as part of our talent acquisition strategy, we launched the eClerx Talent Academy under which we hired professionals with strong fundamental and pre-requisite skills and upskilled them on core and advanced technologies. Our Talent Academy model has allowed us to keep a strong pipeline of ready-to-deploy resources for new business opportunities – whilst supplementing recruitment efforts with a higher level of control and predictability.

In alignment with our strategic priorities, our Talent engagement initiatives were strengthened to support a hybrid and globally distributed workforce. We leveraged digital platforms to enhance connection, recognition, and communication. Regular leadership connects ensured employees remained aligned with business goals and were recognized for their contributions. Immersive virtual and hybrid engagement events played a key role in preserving our organizational culture alive and sustaining high morale, enabling meaningful connection across teams and organization.

Weve integrated HR platforms with our processes to significantly improve the experience for our global workforce through enhanced synergies. This integration has streamlined operations and fostered greater efficiency across all levels of our organization, enabling accurate and real-time reporting.

Employee wellbeing was a key focus area, with initiatives addressing mental and physical wellness, such as on-site health camps, 24 x 7 medical assistance, and counselling support, all of which were highly appreciated by our employees. We also placed emphasis on celebrating employee milestones, beginning with parenting, and introduced recognition to honour these important life events.

Our ‘Communities initiatives scaled new heights as 11,000+ employees were engaged across sites – the initiatives brought employees together around shared passions and interests, fostering connection and camaraderie beyond the workplace. Whether it was sports, health and fitness, travel, women, CSR and ESG initiatives, or the arts, these vibrant groups created spaces where colleagues engaged, inspired, and supported each other – and cultivated a culture of belonging, collaboration, and holistic growth.

Our training and development efforts were recognized yet again by the industry – by way of a Brandon Hall Award for Excellence in Learning and Development and two Asia-Pacific Stevie^? awards.

Cautionary Statement

Statements in the Management Discussion and Analysis describing the Companys objectives, projections, estimates, expectations may be ‘forward-looking statements within the meaning of applicable Securities Laws and Regulations. Actual results could defer materially from those expressed or implied. Important factors that could influence the Companys operations include economic developments within the country, demand and supply conditions in the industry, changes in Government Regulations, Tax Laws and other factors such as litigation and labour relations. Readers are advised to exercise their own judgment in assessing risks associated with the Company, inter-alia, in view of discussion on risk factors herein and disclosures in Regulatory filings, as applicable.