Project Roll-offs, Lack of Backfill Pressurise Revenue eClerx Services (eClerx) has reported a poor performance in 1QFY19 with its revenue declining by a steep 6.3% QoQ (-6.5% QoQ in CC terms) to US$49.2mn (7.2% below our estimate) led by lack of backfill for short-term projects that winded down during the quarter and project roll-offs. In INR terms, revenue declined by 2.5% QoQ to Rs3.52bn (2.5% below our estimate). Despite multiple headwinds on margin front i.e. poor top-line performance, wage hike, higher SG&A; cost and lower utilisation, its EBIT margin expanded by 25bps QoQ to 19.2% owing to cost optimisation efforts and lower depreciation led by annual WDV reinstatement impact. Notwithstanding higher...