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Good evening, good afternoon and good morning, friends, based on geography you're in. Welcome to the Q4 and full year FY '21 Earnings Call eClerx Services Limited. Please note that this webinar is being recorded. The transcript of the webinar will be available in a week's time from the call. Joining you today to give you an update about the quarter, and we have gone by to answer your questions, we have with us top management of eClerx, PD Mundhra, Co-Founder and executive Director; Anjan Malik, Co-Founder and Director; and Rohitash Gupta, Chief Financial Officer. I will now hand over the conference to Rohitash Gupta of eClerx, he'll make his opening remarks, and then we'll move the Q&A session. As far as the Q&A session is concerned, I'll let you know the rules as we start that particular session. Over to you, Rohitash and the standard safe harbor clause applies for all comments and discussions made during this call today. Rohitash, all yours.
Thank you, Diwakar. Very good evening, and we welcome you all to the eClerx Q4 FY '21 and full year FY '21 earnings call for the quarter and 12 months ended on March 31, 2021. Our USD revenue in the quarter was USD 63.8 million, which is sequentially up by 19.7% in USD terms and 19.3% in constant currency terms. Although much of this high-growth -- high sequential growth has come due to full quarter of Personiv revenues, the organic sequential growth was also very robust at 6.3% on a constant currency basis. The full year revenue was over USD 210 million, with 5% growth on year-over-year basis. The total INR revenue in FY '21 came in at INR 15,827 million, which is 6.7% up year-over-year. All the absolute margin metrics were up by more than 30% for Q4 on a quarter-on-quarter basis and FY '21 on a Y-o-Y basis. Our net profit this quarter was INR 988 million. And for the full year, it was INR 2,826 million. Q4 margin expansion was due to strong organic growth in offshore and inclusion of Personiv, supported by stable bulk from home cost environment. Personiv crossed $30 million run rate based on Q4 annualized revenues and had a reported PAT percent in double digits. Onetime acquisition-related costs amounting to INR 52 million are completely expensed out during FY '21. The base revisions for eClerx staff globally are effective April 1, 2021. And we are recommending INR 1 per share as final dividend for FY '21. We had a cash balance of INR 6,572 million at the year-end, which decreased on a year-over-year basis due to the buyback and acquisition done during the year. EBITDA to net cash conversion was a satisfactory 76% level for full year. Most of the key business metrics now include Personiv and much of the quarter-on-quarter change that you see is due to that inclusion. Our DSO for the quarter were firmly placed at the middle of the ideal range of 70 to 80 days. Client counts in all the revenue buckets have increased quarter-on-quarter and will keep changing through next 2, 3 quarters as Personiv clients revenue gets added on trailing 12 months basis. In summary, we are delighted with the performance in FY '21, which was one of the toughest supply side situations we have ever faced and it demonstrates the trust that clients have placed in our performance under pandemic situation. We thank all our employees who have gone above and beyond to delight our clients during this last year. With this, I will hand over the call for Q&A.
[Operator Instructions] The first question comes from line of Ashish Aggarwal. Ashish, please go ahead and when you're asking your question, please take your organization name also. So that it helps us with the transcription space.
Thanks, Diwakar. So this is Ashish Agarwal from Principal MF. I just wanted to understand on the growth front. Obviously, last 3 quarters have been very strong organically also for us. And with now person IC coming in, hopefully, we will have another lever of growth. So how should we look at growth going into FY '22? How is the pipeline? How has been the deal intake? That will be really helpful. And secondly, on the margins from EBITDA margin, EBITDA margins were very strong even in this quarter. The thought process was with Personiv acquisition, there could be some dip in EBITDA margin. So with EBITDA margins already 33%, how should we look at margins also given the fact that some of these COVID related costs, which have come down, will start to increase from FY '22 onwards. Thanks.
Rohitash, maybe I can talk about the pipeline, and you can talk about margins. So I think in terms of growth, we continue to see a reasonably good environment. Obviously, we will have quarterly volatility in terms of growth outcomes. And as you mentioned, we've had 2 or 3 consecutive quarters of very strong growth. So we may have -- we will have some volatility in growth outcomes going forward. But in general, I would say, pipeline continues to be fairly strong. So hopefully, if there is no further disruption in our client geographies in the West, then we should continue to see a good year in FY '22. Rohitash, do you want to talk about margin expectations?
So Ashish, the Q4 EBITDA margins as well as net profit margins that you see are obviously after inclusion of Personiv and they represent the true and fair picture of the state of affairs as of now. Coming to forward-looking direction, I would say, in these margins, and Q4, even last 2 or 3 quarters also. About 300 bps of expansion has come from non people SG&A cost. There has been expansion in people due to people cost reduction also effectively as a percentage of revenue. Which is both in onshore sales and marketing as well as in delivery, gross margin expansion. But that part is a little hard to isolate because of the rapid growth that we have seen over the last 2, 3 quarters. And also because of this new situation of what from whom where measurement of productivity is a little difficult and how long it will last is also difficult to assess. But I would say non people expansion, non people, SG&A expansion of 300 bps. About 2/3 of that was due to travel kind of things alone. And as you can imagine, that travel is not going to open any time soon. And even if it does, I think a lot of it we can save -- continue to save in future also through online meetings and virtual get together, et cetera. So I think that 200 bps is -- much of that can be protected. The remaining 100 bps is more of office related costs and even if we have to get back in 50% capacity to offices, that 100% -- that 100-bps benefit will vanish.
So is it fair to assume that on a normal scenario, right? We continue to -- should see a high high 20s type of margins, right? Obviously, it depends on the growth, how the growth will come up. But as you are seeing right now, somewhere between 20% to 30% is the right number to look at assuming everything becomes normalized, let's say, tomorrow.
Yes, I would agree to that. So you can just look at last 6 quarters, which include both kinds of periods. And given the new trajectory that we are on, I think 28% to 32% is a fair range or near-term future.
Got it. And on the growth front, this is for PD sir. Sir, just wanted to understand that the pipeline remains strong. Is it fair to assume that if there is no more disruption in the developed markets, organically, because personnel will commit for the full year, we could see a double-digit growth going into FY '22.
Well, Ashish, I would say, it's definitely possible, but we don't have that degree of visibility yet to, say, for -- that we will have double-digit growth. Again, we are still a very small business and individual events have significant impact on trajectory and P&L. But all I would say is, look, for now, demand environment remains supportive. Pipeline is as good as it's been in the last 6 to 12 months. So if we have some decent luck, then FY '22 should be a good year.
The next question is the line from the line of Madhu Babu.
Yes. I in terms of personnel acquisition, how do you see the synergies and cross-sell playing out next year in terms of growth? And going by our track record, we used to do buyback every year, but now that we have got 1 tuck-in acquisition. So would we look at more tuck-in acquisitions to start growth acceleration as a more focus area from year on?
Yes. So Rohitash, perhaps I can take those. So in terms of persona, you're right, Madhu, that I think 1 of the first areas that we are collaborating with them on is around revenue synergies and cross-selling. And I would say probably our business and their business is closer together than was the case with and therefore, it's potentially easier to find cross-selling opportunities. So although it's only been sort of 5 or 6 months since the deal closed, I would say there is at least one large win that they had, where we collaborated with them on. And there are 2 or 3 proposals that the 2 companies have made jointly for which third decision is expected in the next few weeks and months. So from that perspective, because we share the same geography for clients, primarily the U.S., the services are closer together. The delivery centers in India and Manila, in that sense, are dramatically closer than was the case with [indiscernible]. The ability to explore revenue synergies is easier for with Personiv. On your second question about buybacks and acquisitions, we don't see those things as mutually exclusive because the business has a lot of cash on the balance sheet and continues to generate cash. So I think given the right opportunities, we can probably pursue both as we did in FY '21. From an acquisition perspective, obviously, it's about finding the right fit, the right asset and the economics of the deal have to work. So it's not something where the stars align frequently. But if we were to find something that was suitable, we still have the appetite and the balance sheet to go ahead and pursue it. Anjan, I don't know if you want to add something on either of those 2 topics.
No, I think, PD, you've covered it.
Yes. And congrats on coming back on the growth.
The next question is from the line of Manik Taneja, JM Financial.
Thank you for the opportunity. I joined the call a little late. Just wanted to understand your outlook for the future. I know you don't provide any formal revenue guidance. But just wanted to understand some of the qualitative trends that you're seeing across the different facets of your business, in terms of financial services, the customer care business and the and the digital business.
Anjan, why don't you start? And then maybe I can chime in to add if anything is required.
Manik, okay. So I think we've seen so we started in this journey. We've talked about a couple of years ago, where we were trying to channel our energies into a few service areas in which we were we felt that we had an excellent reputation. We had a very high-quality offering. So this was wrapping analytics, automation platforms, et cetera, around specific service areas. That journey has meant that we've been able to see growth in specific parts of our clients' books in those 2 areas, customer operations and transformar ETS. And PD will talk a little bit about digital, that coincided with a large increase in demand in last year, which I think actually took a lot of people by surprise. And those 2 things actually make us -- those 2 events. The fact that we've got all these very resonant services and the fact that we've seen demand actually increase over the last 6 months from our large client base. Both through existing clients and through just number of RFP activities that we're seeing. It makes us pretty confident about demand and our ability to supply that demand in the medium term. That's a very high level answer. I don't know PD, if you want to add to that.
No. I think, Manik, I don't know when you joined, but obviously, growth being a key topic, there were a couple of prior questions also on the same theme. And I would say our answer is that demand pipeline to Anjan's point is decent. And if there is no big disruption in the risk because of COVID, et cetera then I think much like the industry, we hope and expect FY '22 to be a decent year for us. On a more medium-term look back, as you followed the company for a while, so we would know that one of the reasons we've sort of faced some headwinds in the last 3, 4 years has been 3 or 4 client-specific large revenue reductions, right? And if we don't experience that in the next 6 to 18 months, then sort of the natural momentum that we have around gross sales should help us post positive growth numbers. So I think that's what the broad thinking is at this point.
Thank you for that response and best of luck for the future.
Next question is from the line of V.P. Rajesh of Banyan Capital.
Thanks, Diwakar. Congratulations on a good set of numbers. My question is this strategic accounts growth, which is 22% this quarter. If you can just provide some color on that? Is it because of Personiv client moving into that bucket? Or it was just the older clients of eClerx suddenly giving us more business.
Rohitash, being to take that?
Yes. So some of the Personiv clients have actually crossed and entered into the $3 million, okay. And so that's one point. In terms of our native top accounts, we have seen, which is basically top 10 elevate accounts ex Personiv, we have seen growth in majority of them on a year-over-year basis. There have been few minor declines also because of tactical either short-term roll-offs or otherwise, but majority of them have shown growth.
Right, what is the growth for those clients?
Sorry, you mean the SI area [indiscernible].
No, I mean the native clients you were referring to.
So for example -- yes. So there has been very good growth in a couple of the customer operations client. One, because of fire tile business growing for some of them and some -- it was offshore digital care type of business that grew rapidly. So some of those large opportunities in those existing top 10 clients have created momentum increase on a Y-o-Y basis. Also, please remember that when you see the y-o-y growth, last Q4 of FY '20 was somewhat unusual because of last 10 to 15 days of productivity loss and revenue loss. So some bit of jump may be artificial in that.
Right. So what would you say is the quarter-over-quarter growth for those native eClerx client?
Give me at -- do you have any other question? I can just pull it.
Yes, sure. Yes. And my other question was that on the supply side, our attrition has gone up and if you can just comment on what is the situation? Because for the -- all the other IT companies, we hear that supply is very tied. So are we also facing that? Or that's not impacting the outsourcing industry?
So maybe I can take that. I think for us, it's a little bit more nuanced. Attrition has gone up partly because during the main months of the pandemic last year, attrition was very, very low for us. So I'm sure there is some degree of pent-up adjustment that's happening there. But in terms of onboarding new talent, I would say, it depends on the area for the majority of work we do I think we are able to find the skill sets we need with the same lead time and more or less at the same cost levels as we were in prior quarters. I think it's only if you're looking for some niche skills or very specialized talent that there is more constraints in the talent market, and it takes longer. The counterpoint to that is, at least currently in this work from home configuration, we can hire from anywhere in India. It doesn't necessarily need to be restricted to Bombay, Pune Chandighar because everybody is working from home anyway. So it's less relevant with city the person is working from as long as they have good infrastructure. So that helps a little bit in addressing short-term talent constraints. But I would say it's not a broad concern across the board, maybe in certain niche areas. Rohitash, maybe you have the answer to the prior question.
Yes. So VP, so even on organic basis, the Q-on-Q growth, my comment holds good, which is that on Q-on-Q basis, majority of the top 10 clients out of which, obviously, as you noted, some are Personiv related now for the quarter. But even remaining clients, majority of them saw Q-on-Q growth as well as Y-o-Y growth.
Okay. All right. Great. Thank you, guys, and all the best.
The next question is from the line of Sandeep Shah.
Yes. Congratulations on a very excellent set of numbers. PD, just on your comment, if we exclude the Personiv and look at the organic growth entering into FY '22 then on of the previous questions asked whether we can achieve a double digit. You said, not sure, but if I look at the Q4 run rate, and doing the annualized growth itself gives you a growth of 12%. So why the confidence is not higher that 522 actually be even close to mid-teen or higher than that on an organic basis as well. So what are the issues which takes to backstep to remain bullish on the business?
No. I think, Sandeep, the question is, what is the baseline you're comparing with when you say double-digit growth, if you're going to compare a crude versus a crude, then I think your point is correct. The mathematics itself would suggest that doing double-digit growth is well within reach just because of how depressed H1 was last year. If on the other hand, you are taking Q4 exit, and then sort of looking at incremental quarter-on-quarter growth on that through the year, then things are not as clear. So I guess, if you're doing an accrued FY '22 versus FY '21 compared, then the baseline -- the base effect itself makes it much easier to hit that double-digit and teens number.
Okay. Okay. So that's where your comment is the volatility in growth may be there in the coming quarters?
Yes. So I mean, I think we've had 2 quarters of between 4% and 6% quarter-on-quarter sequential growth organically. So I mean, that's clearly an outlier, right, in terms of consecutive quarters. I would not want to set the expectation that FY '22 will see 3 or 4 quarters like that. We'll have ups and downs during the quarter, but on the whole, I think we should have a good year.
Okay. Perfect. And [indiscernible], we had a comment in terms of the business, which gets out to leakage, generally tends to be $15 million, $20 million per annum versus new business, which we add is close to $40 million, $50 million, any update or status where you believe if client-specific issues are not there, whether any change in this kind of a matrix, if we have to include Personiv now into this?
Rohitash, do you want to take that?
Yes. So Sandeep, I just wanted to set the context on your comment. So you're right that historically, until FY '20, we had roughly around $40 million, $50 million of new sales in a year and $30 million, $40 million of roll off. So it was a fairly high number for roll-offs. Only during FY '21, our roll off level came down to a much lower number than that $30 million, $40 million. How long that state will continue in FY '22, that's a little bit unpredictable. But as of now, we still see a low level of roll-offs at this moment. So any other question you had on this? Sorry, I missed that.
Yes. So whether that number changed it if you have to include Personiv now, which would be for the full year of FY '20?
So Personiv business has a lot of concentration, as you could probably differ from the numbers. And the large clients have been there for almost a decade or more and quite sticky. Obviously, their clients' business may itself be going through transformation and some of that may bring some churn. But most of the projects in those top clients or concentrated clients are very, very annuity-based and long-term or have been so up until now.
Okay. Okay. If I can squeeze one more on margins. Rohitash, you commented about the 300 bps. So 200 bps was slightly clear. Can you repeat what you meant to say about the balance 100 bps, which was the saving in this year?
Yes. So 300 bps is the non people-related cost savings. And 100 bps that you mentioned is pertaining to office related cost. So because we are working majorly from a home, some of the cost of operating office that full strength is not there and that amounts 200 bps.
In the near term, we can do 28%, 32%. And if more and more travel starts, it can lead to slightly lower margins beyond that.
Correct. I think travel may not go back to the same FY '20 or pre COVID levels because of the new methods that behavior change, et cetera, that has happened during this time. But you are right, it can depress the margin from the current level in percentage terms.
[Operator Instructions] The next question is from the line of Debashish Mazumdar from Edelweiss.
Thanks for taking my question. I have some question around qualitative understanding around the BFSI, digital and the telecommunication and media segment-wise growth that you have already have answered that question to some extent, but if you can add some little bit more color on that, one of your competition has said very high about the BFSI, especially the mortgage market growth in U.S. because of the low rates. So if you can help me to understand whether we are also seeing the same trend, what is our growth prospect going there? What is -- what are our plans around that? Or it's that for our case, mainly the digital is driving that growth? If you can help me with that.
Anjan, do you want to respond?
Yes. I mean, I think the mortgage business that fast source is focused on, I guess, is a bit different from the kind of financial services that companies like us or we are focused on, as you know, our bread and butter in the financial market space is in what we call institutional sales and trading primarily. So that business is driven by a different set of demographics. And of course, it's seen growth, but not of the type that we have seen that something like FSL will be seen in mortgages, also because it was coming off a very low base. So if you look at the performance of our markets business, it's actually been very steadily upwards over the last 12 to 18 months, both through growth in existing clients and through acquisition of new clients. If you look at the customer operations business, we have seen a large amount of growth, which is being driven again by what we call digital care, which is effectively customer support in various formats, whether it's voice or chat or social media and in and around those activities. So we've seen a fair amount of growth in that area. And in the digital space, I think a lot of our growth has come from things of the nature of analytics, where we're doing more and more front-to-back analytics for the marketing organizations and our clients. It's coming from actually interestingly, growth in technology services, things like RPA and bits and machine learning and also in content development. So CGI has been a growth area for us. And of course, marketing automation, which has been upgradable, it continues to see growth. So I think we've seen a fair amount of demand across our book of services. And the point that I was trying to get to earlier is that I think a lot of it is a function of the fact that the areas in which we have invested are all areas that have seen demand growth over the last 12 months.
Understood. One last question. If I see the pipeline, which you are saying, which is decent for us, this is tilted towards which part of the business, if you can help me with that.
Actually, Debashish. Sorry, go ahead, Anjan.
No. I think if you -- again, if you look at the -- for example, if you look at our pipeline data, the business always has the following characteristics, right, which is that you'll see lots of deals of smaller values in our digital book business. And you will see fewer deals, but a much larger value in both the customer operations and the markets business, right? So probability adjusted, I'd say that they're probably all 3 the same. It's just that 1 -- in 1 business, you tend to get lots of deals of smaller value and the others are fewer deals with lot of large values. So they have a large -- to the point that video is making either, we're a smaller company, so they can have a large impact on the upside or the downside for us in terms of growth.
Thank you for answering my question. I wish you best of luck.
We have a follow-on from the line of Sandeep Shah.
Yes. Just before Personiv, if I'm not wrong, we used to see business as 40% from capital market, 40% from digital and 20% from the cable and wireless. So with personnel, can you break down the business in whatever buckets you want and give a brief outlook in terms of demand, you might have answered this, but this may help us in terms of annualizing company better going forward as a cash?
Rohitash?
So Sandeep, we have never formally disclosed that breakup because as Anjan and PD were also mentioning 1 large outcome on positive or negative side can change that mix and make our numbers that we have stated very different. But broadly over last 3, 4 years for our native business, the percentages that you mentioned are roughly representative. Coming to future disclosures, we are treating person also as part of single segment that we operate in, which is broadly a business process management. And we do not intend to disclose or split Personiv business further in near term, but I can qualitatively tell you that Personiv business has good representation of what we would call digital and customer operations. So a very good representation of those 2 businesses there, if we were to ever explain it.
Okay. Okay. Helpful. And if you can split demand outlook for these 3 segments, which we generally identify, that would be helpful. So do you believe most of the business has a good demand or maybe outside digital, things are still volatile.
Let me take that question. So digital, remember, is not an industry-specific service. It's more cross-industry and it's really aimed at the office of the Chief Marketing Officer. So I'd say that demand there continues to be high, but as we've said before, because of the nature of the services that we provide, the deals tend to be of a smaller size. Although over the last 18 -- over the last 24 months, we've made a conscious effort to upsize those deals. And we've had some success in that, especially as we've included automation and analytics in the work that we do. So I'd say demand there definitely came back very strongly after the initial COVID quarter because, obviously, a lot of our clients were affected by shutdowns, right, because, for example, because we support multiple industries. The MSO, or the multi-system operators, the Camila Delco Group, which is broadly what we support in customer operations, obviously, saw demand return to them as people spend more time at home and there was more live streaming of events and activities. So we actually saw, after the initial COVID shot, a lot of demand for customer care support. And we've seen that grow because those industries have obviously benefited from sort of the work from home chain. So I think customer operations have seen that growth because of a demographic change to that client base, which probably isn't true for retail, for our digital business because there's lots of different industries. Market -- the financial market business, I'd say that in Australia way has been yet the most unaffected side. I'd say that there hasn't been a marked shift in demand. Although I think what had happened is that maybe transitions to captives slowed down during this period. And possibly, what work that was being done onshore because of things like minimum wage increases and the shortage of labor. Maybe we saw more demand offshore than we have seen in previous years. So I'd say the most native -- like the industry that benefited the most probably the MSO Telco business in our portfolio than its markets, then I think it's some parts of digital towards the end of the year, that did really well after having suffered in the beginning.
This is very helpful. Just Rohitash, can you describe what could be the wage inflation headwind in the first quarter as a whole? And with Personiv, can we expect the depreciation run rate and the tax rate of what is reflecting 4Q can continue going forward?
So on the wage, we are -- we obviously benchmark with what industry is doing what has done in the past. And wage increments in this cycle have been fairly normal as per the industry standards, what we have heard from other companies of similar size. So it will be in mid-single digits as not very different than pre-COVID times, actually. And to your second question -- sorry, what was your second question?
With Personiv, the depreciation and the tax rate can continue as it is?
Yes. So depreciation and tax rate. So tax rate, just keep in mind that some of the Personiv units offshore operate from tax advantageous zones. And some of the units are still within that first 5 years or so. So slowly, the tax rates may increase maybe after a year or so, and it will gravitate towards the normal -- no SEZ benefit the kind of tax rate that prevailing in India now, and which applies to other e-clubbing in India. On the depreciation, the situation is a little fluid in February, March, we thought that the CapEx cycle is over. But because of second COVID wave and some bit of growth and headcount in our India businesses, we have to buy a lot of CapEx and laptops, et cetera. And that will reflect in added depreciation, but if you look beyond a quarter or 2, if you look little medium-term picture, I think the depreciation is a fair representation that you see in Q4, we will get some benefit in Q1 because of the new reset of WDV. So the additional CapEx depreciation may get offset by that. So I don't think you should model any different percentage of depreciation as a percentage of revenue than what you have seen in Q4.
Okay. And the Wajax will cover 100% of the employee, right, in the first quarter?
Yes. Correct.
We have a follow-on question from the line of Ashish Aggarwal from Principal.
I just wanted to understand this pipeline, which we have, will it be offshore heavy in terms of delivery? Or do you think it will be a fair mix of what we are currently between onset and offshore?
So maybe I can take that. I think what we've seen in the last 2, 3 quarters and which has also helped margins is that the mix of business has shifted slightly more towards offshore than onshore. Part of it is because some parts of our onshore business are meant to support clients on-premise. And then clients themselves are not working from their offices, there is no question of our consultants being allowed into their offices. And if everybody is working from home, then they'd rather prefer the lower cost that come with somebody working offshore. So in the last 2, 3 quarters, incrementally, we have seen a little bit of shift more towards offshore. And at least for the near future, I would think that, that mix will continue to stay stable. If anything, perhaps we might see more work offshore.
We have a follow-on from the line of V.P. Rajesh from Banyan Capital. [Operator Instructions]
Yes, thanks. So PD, you said that buyback and acquisitions are not mutually exclusive. So should we expect another buyback this year?
Well, I think we can't do something that there needs to be a minimum 12-month gap between successive buybacks as per SEBI regulations. So we are still within that 12-month period. Let us come to the end of that period, and then we'll evaluate what makes sense at that time.
Right. And that period gets over, I think, end of July. So that's not too far away. That's what I was wondering about this.
Yes, I think in July or August, something like that. So we'll evaluate at that point and come back to you guys with what the thinking is.
We have a question from the line of Ruchi Burde.
Congrats on very good quarter. Gentleman, I have 1 question. Now with the change in the on-site offshore business mix, could you help us understand how the state of operation looks like at our on-site location in terms of utilization and the profitability scenario there, that would be -- that's a true.
Anjan, over to you. Do you want to take that?
Yes, sure. So we don't -- I mean, I think the only really dedicated facilities that we have for delivery onshore is the facility in fanfold and by onshore, I'm only using -- I'm excluding, for example, at the moment, our facilities in Thailand. And of course, the facilities that we've inherited through Personiv, but at the moment, and for the last 12 months, in fact, 15 months, we've been effectively entirely work from home. So what we have found is that our ability to provide onshore services is actually greater than it's been in the past because you're not actually limited by physical space. So having said that, we haven't reduced any office costs as such up until now, and we don't plan to, but we don't plan to grow it. So we do think that any additional work that we're able to get onshore, we should be able to satisfy with our existing fixed cost or at least our existing fixed footprint of office space. I think that also applies to the work we're doing in Verona within CNX.
Yes. All the best for the future.
We have a follow-on from the line of Sandeep Shah.
Yes, PD, I think you made a comment about the synergy benefit. So can you, once again, repeat, just to understand, you said 1 deal has already 1 where eClerx has tried to cross-sell its own offerings to personal clients, and there are other Q3 joint bids as a whole. So how is the progress? And can you give some more highlights on the change?
Yes, Sandeep. I think the progress is good. Very honestly, if you had asked us back in December, what level of collaboration, we might reasonably expect to see between the teams in the first 6 to 12 months. And if you benchmark where we are today versus that, I would say we are ahead of expectations. There's tangible collaboration happening. As I mentioned, there are 2 or 3 proposals with clients, which require delivery from both teams, Personiv as well as eClerx's teams. Hopefully, we'll win at least one, if not more of those in the next few weeks and months, and that makes it much more tangible, but broadly speaking, I would say it's easier for us to exploit these synergies because we work in the same geographies from a client perspective, talent pools are located in similar geographies and the nature of what we do is not that different. Where it's interesting is, just to be more specific, for example, we have a location in Coimbatore, which gives us access to talent, perhaps at a different price point than what we would be able to achieve in Bombay or Pune or Chandigarh, for that matter. We also have a location in Manila, which gives us delivery outside India and access to a different set of skills, including voice skills, that we may not be able to source in India. We have automation skills that they perhaps may not have organically. So in that sense, I think that there is good scope for complementing each other's trends.
And just 1 bookkeeping. Rohitash, if we look at the selling and distribution, that has not changed despite persona been consolidated for the full quarter. So whether the current level of 10% to 11% can continue going forward? And what is the reason where selling and distribution cost is lower within personnel?
Yes. So 2 things, and I will sort of give you a flow and then you can model whichever way you find it appropriate. So basically, Personiv onshore BD team is just a few people, probably 5 or 6. And their cost has been added. Having said that, there has been a compensating factor in Q4 because our native business development team's variable pay was already caught up for the full YTD in Q3. So Q3 onshore variable pay was already caught up for 9 months. So basically, that provided some Q-o-Q cushion in Q4 to absorb some of that Personiv BD cost of for 5 people. So basically, if you take H2, probably, but that will have Personiv only for 1 quarter. So basically, if you take percentages, average percentage for both the quarters, probably it will be a better representation.
Okay. Okay. So just a clarification. You said the variable pay in the December quarter included for all the 4 quarters. So I didn't get it clean.
So basically, as you know, H1 was quite depressed, especially Q1, and we were not expecting this amount of high-growth towards the end of the year. And these -- many of these bonuses or variable pay is basically linked to, at least for this year, it was linked to H2 performance. So basically, we had to guesstimate how the Q3 and Q4 will turn out back -- way back in Q1 and Q2. So we ended up underestimated. By Q3, the picture became clear. So we caught up for the 9 months of accrual for the full year bonuses already in December. And that's why Q4, that depression came.
[Operator Instructions] Since there are no further questions. I'll hand it back to PD for his closing comments.
So thank you, everyone, for joining us on our earnings call for the last quarter of fiscal '21, and we look forward to connecting again with -- on our Q1 results in the July, August timeframe. Thank you.
Thank you. Thanks, everyone, and stay safe.