Growth in transformational business services led Nasdaq listed business process outsourcing firm EXL Service Holdings net income grow by 26 per cent for the first quarter ended March 31, 2008. The growth was from $5.4 million (about Rs 22.2 crore at a conversion rate of Rs 41) in the corresponding quarter of last financial year to $6.8 million (Rs 27.8 crore) for the current quarter.

Its revenue for the quarter ended March 31, 2008 was at $50.9 million (Rs 208.6 crore) was up 27.8 per cent from $39.9 million (Rs 163.5 crore) registered during the same quarter of the last financial year.

Reduction in interest income due to lower market interest rates, lower gains from foreign exchange hedge contracts and a higher effective tax rate impacted the firms quarter-on-quarter results. Sequentially (compared to last quarter), its net income dipped by 30.2 per cent from $9.8 million — and revenue was up 1 per cent from $50.4 million.

Vikram Talwar, executive chairman of EXL, said: "By focusing on providing transformational outsourcing solutions to our clients, maintaining our leading client satisfaction scores and high-quality global delivery, and continually expanding our service capabilities, EXL has delivered on its expectations for the first quarter of 2008."

For the year 2008, the company's guided for revenues of $205 to $210 million. The company expects that operating margins for the Second quarter of 2008 will be negatively impacted by the cost.

Matt Appel, CFO of EXL said: "Our first quarter revenues and operating margin were driven by accelerating growth in our transformation services business and flat revenues in our outsourcing business attributable to 3 per cent depreciation of the British Pound as compared to the fourth quarter of 2007."

Revenue from its largest client represented 23.5 per cent of its total revenues for this quarter as compared to 27.7 per cent y-o-y. Revenues generated from three large clients represented 52.2 per cent of the revenue.

As of March 31, 2008, EXL had a headcount of approximately 10,500 individuals (including personnel managed under structured client service agreements). The attrition rate for billable employees during the first quarter was 32 per cent.

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