Sell

The traditional laborarbitrage model is evolving, as the boundaries between IT/BPO and front/backoffice services increasingly blur, with clients seeking domain-led partners that can advise, implement, and operate workflows.

Other income to PBT was ~47% in FY26. The valuation multiple (P/E) based on core business earnings, i.e., excluding cash and tax-adjusted other income, stood at 48x on FY26 earnings. Revenue grew 1.4% YoY in FY26; however, EBITDA/PAT declined 12.6%/8.9% YoY due to weak summers and intense competitive activity.

eClerx is positioning itself toward domain expertise + tech + data + analytics + AI, with limited exposure to low-end, easily automatable work and a more annuity-like revenue mix.

Cyient is moving up the value chain, from niche ER&D services to ‘Whole Asset Lifecycle Engineering’, expanding its TAM from $80-100bn to $2.4-3.2trn.

orderbook stood at 14,502 crore as 3x TTM book to bill. Although management targets new order inflows of 11,000-12,000 crore for FY27 (having won ~5,500 crore in Q1), clarity over execution visibility is missing. Moreover, over 6,000 crore more than 41% of the total orderbook-is currently not under execution due to persistent land acquisition delays, pending appointed dates, and right-of-way permissions across major projects. Furthermore, intense sector competition threatens project win profitability...

The order book stood at 21,096 crore as of Q4FY26 (4.6x book to bill). Ahluwalia enjoys a healthy balance sheet and is a net cash company Q1FY27 performance: The consolidated revenue at 1125.8 crore in Q1FY27, was up 12% YoY. EBITDA came in at 48.3 crore, with margins down 430 bps YoY to 4.29% mainly caused due to higher labour costs, and lower labour availability coupled with one-off impact of 29 crore bill value reduction on the completed...

Sales/EBITDA/PAT were 0.8%/5.9%/-0.3% above our estimates. EBITDA margin surpassed our estimate by 98 bps to 19.5%

Page Industries’ (PAGE) Q1FY27 revenue grew ~8% YoY, driven by a modest volume uptick (+5.7% YoY). However, a deeper look reveals persistent structural challenges.

DCX Systems reported a weak set of numbers in Q1FY27, with revenue declining 54% YoY and 50% QoQ to INR 1,031 Mn, significantly below our estimates, primarily due to execution delays as highlighted by management earlier.

Overall volume growth of ~24% YoY driven by tillers (~18% YoY), 11% revenue growth sustained despite average selling price slide of 11%

Tata Motors Passenger Vehicles (TMPV) adjusted PAT came in at INR11.4b in 1QFY27 compared to our estimated loss of INR1.2b, on the back of a betterthan-expected performance in JLR.

Relaxo Footwears (RLXF) sustained its recovery in 1QFY27, with revenue growing 8% YoY to INR7.1b, broadly driven by higher realizations. ASP rose 10% YoY to INR166, while volumes declined 2% YoY.

Gujarat Fluorochemicals Ltd. (GFCL) reported strong performance across all its business verticals in Q1FY27, with revenue of INR 15,880 Mn, up 16% QoQ and 24% YoY, exceeding our estimates. The company reported EBITDA of INR 4,280 Mn, up 24.4% YoY and 39% QoQ, with EBITDA margin at 27%, broadly in line with the previous year. EBITDA also exceeded our estimates.

MRF’s 1QFY27 adj. PAT at INR4.7b was largely in line. PAT was supported by higher-than-expected other income despite weak EBITDA margin at 11.4% vs. our est. of 12.6%.

Depositories remain a structural play on India’s capital markets, buoyed by higher retail participation and distinguished by a mix of annuity and transaction-based business.

The company reported revenue of INR 4,559 Mn, up 27.2% YoY and 15.5% QoQ, with
gross margin at 44.5%. EBITDA stood at INR 1,159 Mn, up ~112% YoY and 23% QoQ,
with EBITDA margin improving to 25.4%. The improvement in margins was driven by
higher plant utilisation, better fixed-cost absorption and lower overhead costs as a
percentage of sales.

Fine Organic Industries (FINEORG) posted a strong operating performance, with an EBITDA growth of 42% YoY, primarily due to gross margin expansion of 500bp YoY to 45.4%.

Dynamatic Technology’s (DYTC) Q1FY27 EBITDA, at INR 551mn, came in ahead of our estimate of INR 480mn (+15%), up 46%/13% YoY/QoQ, with margin expanding 280bps/180bps YoY/QoQ to 13.0%.

Lupin delivered a strong Q1FY27, led by exclusivities in the US (+29.8%) and robust growth in emerging (+51.7%) and other developed markets (+48.3%).

Deepak Nitrite (DN) reported a strong operating performance on a low base. Its EBITDA surged 2.8x YoY to INR5.4b, led by 3.5x YoY EBIT growth in the Phenolic segment and 89% EBIT growth in the Advanced Intermediates (AI) segment.