eClerx Services Ltd.

NSE: ECLERX | BSE: 532927 | ISIN: INE738I01010 |Industry: BPO/KPO
|Mid-range Performer
Durability score
60 /100
Valuation score
30.7 /100
Momentum score
39.1 /100
Market Capitalizati...
3,481.4 Cr.
AVG Broker Target
968.8
PE TTM Price to Ear...
15.2
eClerx Services Ltd.    
24 May 2019, 08:39AM
921.25
1.53%
HDFC Securities
eClerx has witnessed three consecutive years of USD revenue stagnation with declining profitability & cash generation. Return ratios have stumbled, RoE is at 18% (vs. >30% in FY17). The structural change in eClerx' operating model (shift to onshore) has resulted in EBIT margin contraction from 31% to 18.5% with onshore rev% increasing from 13% to 22% in the last two years. We reckon that the shift to onshore will continue given the on-site heavy (North Carolina center expansion) digital projects coupled with low demand for traditional KPO services which are at risk of getting automated. We remain cautious on high concentration (68% of rev from T-10 accounts), shorter duration projects providing limited visibility, lower quality of revenue mix and growth lag to onsite investments. We factor USD rev growth of 7.9/8.6% with stable EBIT% at 18.8/19.2% for FY20/21E. We believe revenue growth assumptions are optimistic given the limited visibility and challenging macro environment. Risks to our thesis include traction in digital portfolio and increased offshoring. We maintain SELL on eClerx post an in-line 4Q on revenues and better operating performance. We cut P/E multiple to 11x (vs. 13x) amid near term headwind to margins and lesser visibility on revenue growth.
HDFC Securities downgraded eClerx Services Ltd. to Sell with a price target of 815.0 on 24 May, 2019.
eClerx Services Ltd.    
24 May 2019, 12:00AM
921.25
1.53%
eClerx Services Ltd. has an average target of 968.75 from 5 brokers.
eClerx Services Ltd.    
24 May 2019, 12:00AM
921.25
1.53%
BOB Capital Markets Ltd.
eClerx (ECLX) reported an above-expected operating performance in the Mar'19 quarter on the back of in-line revenues and an operating margin beat. A combination of offshore revenue growth and onsite revenue decline aided margins, though this trend is unlikely to continue, in our view. Management was noncommittal on FY20 revenue growth and margins, citing uncertainty led by short-tenured contracts and a changing business mix. We maintain...
eClerx Services Ltd. is trading below all available SMAs
eClerx Services Ltd.    
24 May 2019, 12:00AM
921.25
1.53%
BOB Capital Markets Ltd.
The BJP led NDA is set for a resounding win with an even bigger majority (344 seats) and a higher vote share (up 9% versus 2014). In its election manifesto, BJP aims to increase the size of the economy to US$ 5tn by 2025 led by Rs 100tn of infra investment. Rural India will get 25% of the above allocation. Roads, housing, and water will get priority. Further, farmer income and rural demand will get a boost with wider coverage under PM-KISAN. Continuity of...
eClerx Services Ltd. is trading at high day volume of 34247.00000.
eClerx Services Ltd.    
15 Mar 2019
921.25
1.53%
BOB Capital Markets Ltd.
India's US$ 160bn logistics industry is amidst a much-needed transformation led by (1) structural reforms (GST, e-way bill) and the government's infrastructure thrust (DFC, Sagarmala), (2) the emergence of new-age, service-oriented businesses versus asset-heavy models, and (3) growing formalisation of the sector, propelling organised players to the fore. We prefer the emerging 3PL and express segments for long-term value creation. Among...
eClerx Services Ltd. is trading at high day volume of 34247.00000.
eClerx Services Ltd.    
14 Mar 2019
921.25
1.53%
BOB Capital Markets Ltd.
Announces Rs 2.6bn buyback a transient trigger Event: eClerx (ECLX) has announced a buyback worth Rs 2.6bn through the tender offer route at a maximum price of Rs 1,600/sh (39.6% premium over...
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eClerx Services Ltd. has lost -18.47% in the last 1 Month
eClerx Services Ltd.    
01 Feb 2019
921.25
1.53%
HDFC Securities
Maintain NEUTRAL with TP of Rs 1,035, 13x Dec-20E EPS. eClerx posted in-line revenue and weak operating performance. Revenue stood at USD 50mn, 0.7/3.3% QoQ/YoY in CC terms. EBIT% contracted sharply by 514bps QoQ to 15.3% impacted by higher employee cost (-260bps impact) and higher SG&A; (-200bps impact). Operating performance impacted by investments in onshore delivery (-250bps impact) and facility expansion (Pune center). APAT was lower at Rs 0.39bn on forex loss impact and higher ETR.
eClerx Services Ltd. has an average target of 968.75 from 5 brokers.
eClerx Services Ltd.    
01 Feb 2019
921.25
1.53%
ICICI Securities Limited
Reported PAT of | 39 crore was below our expectation of | 64.6 crore on account of a sharp margin decline and lower other income Pressure in emerging clients to continue in near term The company posted a marginal increase of 0.4% QoQ led by 4.3% growth in managed services and 5% in onsite revenue. This was offset by 0.9% decline in offshore revenue and 2.6% drop in revenue from emerging clients (non top 10 clients). Decline in emerging clients was mainly on account of two clients in $1-5 million revenue category...
eClerx Services Ltd. is trading at high day volume of 34247.00000.
eClerx Services Ltd.    
04 Dec 2018
921.25
1.53%
Emkay
Refer to important disclosures at the end of this report Challenges to turn into opportunities profitability in FY16-18. The key factors affected the performance were: 1) being on the wrong-side of the actions at the client's end; and 2) a mix change toward onsite, with low gross margins (onsite now accounts for 22% of revenues versus 1% in FY15). Despite the modest performance in the recent past, we are certain about a gradual recovery in growth on account of: 1) stable deal momentum (adding about USD40-50mn in new TCV); 2) no client roll-offs (witnessed no adverse case in the last six quarters); 3)...
eClerx Services Ltd. is trading at high day volume of 34247.00000.
eClerx Services Ltd.    
28 Nov 2018
921.25
1.53%
BOB Capital Markets Ltd.
eClerx (ECLX), in a recent management meet, reiterated its strategy of onsite presence ramp-up in a bid to move closer to clients. Management indicated possible double-digit growth in FY20 on receding client-specific challenges and healthy deal wins. Operating margin uncertainty persists despite levers such as potential price hikes in top 10 accounts and favourable hedge positions (from H2FY20). Given the clouded margin outlook, we reiterate REDUCE with an unchanged Sep'19 target price of Rs 1,080....
eClerx Services Ltd. has an average target of 968.75 from 5 brokers.