Offshore BPO pure play EXL Service is pushing back against the recent margin erosion that it and peers like WNS have been facing (see EXL margins under pressure and WNS pulling in different directions). For the three months to 30 September, operating margin rose to 15% vs. 11.7% last time, and revenue grew 12.6% to $112.6 (up 17% ccy), and up 4% qoq. Growth was driven by existing clients in insurance, healthcare and utilities, and across service lines of outsourcing (up 11%) and transformation services (up 23%). This better performance gave EXL’s shares a boost (up c10%), following their recent downward trend.
Like many of its peers, EXL is focusing on growth in business process analytics, where it claims to have built a world-class banking practice, and is generating ‘robust new business’ with several global banks. Last month, EXL bought US-based health software provider Landacorp for $37.5m in cash, to develop an end-to-end platform-based BPS offering into the healthcare payer space via Landacorp’s CareRadius payer platform. This will also be an important component in offering analytics into the healthcare space.