EXL's margins under pressure due to rising rupee
Friday, 10 August 2007, 19:30 IST
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New Delhi: EXLService Holdings Inc., one of the leading integrated business process outsourcing (BPO) firms operating from India, Thursday reported negative margins for the quarter ending June due to the appreciating rupee. For the US-based firm, which calculates its financials on the calendar year basis, the operating margins for the second quarter came down to 6.1 percent from 12.3 percent in the same period last year. "The operating margin was negatively impacted in the second quarter by a number of factors including the significant appreciation of the Indian rupee, continued softness in the research and analytics business line, annual wage increases and the opening of a new 1,200 seat operating facility," the company said in a statement. It also registered negative gross margins that fell to 33.1 percent from last year's 36.8 percent. However, it posted robust revenues of $43 million in the quarter ending June compared to $25.2 million in Q2 last year, an increase of 71 percent. "EXL secured 11 new clients this quarter including several blue-chip names in line with our strategy of acquiring the highest quality clients in select industry domains. We also entered a new vertical this quarter with the addition of a Fortune 500 transportation services provider," said Vikram Talwar, CEO and vice-chairman, EXL. EXL's net income also zoomed to $5.6 million in the second quarter compared to $1.4 million in the same period last year. "EXL's revenue growth outperformed expectations this quarter and was led by continued strong momentum in the BPO business and a record quarter in advisory services," said Matt Appel, chief financial officer, EXL. "As a result, we are revising upward our 2007 revenue guidance to between $168 million and $172 million from $160 million to $170 million previously. In addition, despite the significant rupee appreciation during the second quarter, we are reaffirming our adjusted operating margin guidance of 12 percent for the year," he added.
Source: IANS
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