eClerx Services Ltd. share price target

3Q stronger than expected. FY26/FY27/FY28 likely to see mid-high teen revenue growth in USD terms with improving margins. An outlier

Better than estimated revenue growth and margin in 2Q. 2HFY26 should also be solid. Mid-High teen USD revenue growth likely in FY27/FY28

1QFY26 CC QoQ growth was robust at 3.3% (broadly in line with our estimate). EBIT margin was much better than estimate (by ~200bps)

3QFY25 broadly in line. A margin miss. Expect 4Q QoQ growth to be stronger. Expect low teen USD revenue growth in FY25-FY27.

5.7% CC QoQ revenue growth and 480bps EBIT margin expansion was ahead of estimate driven by financial markets vertical and top clients

eClerx posted weak operating performance in Q1. Revenue fell 2% QoQ, hit by budget cuts, drop in project renewals and unanticipated project cancellations particularly among large clients in the digital and financial markets. OPM declined by 530bps QoQ. Management expects revenue to rebound in Q2 and log closer to Q4FY23 levels, further improving in H2.

eClerx reported a steady performance in Q4. Revenue grew 0.6% QoQ (flat in cc terms) impacted by weak discretionary spends. Margin performance was healthy, with reported OPM expanding by 211bps QoQ. Slower decision-making, slow conversion of deal pipeline and delayed deal renewals on account of uncertain macro-environment would weigh on near-term growth.

eClerx Services Q3 results were better-than expected on US$ revenue growth but profitability was lower-than-expected. Q3FY23 revenue stood at US$ 85.1mn (grew 3.2% QoQ as well as cc terms). Top-10 client growth declined 0.6% QoQ in dollar terms, led by lower onshore revenues. The management indicated that top-10 client softness was limited to onsite engagement and that offshore momentum is intact.

eClerx is a leading KPO player in the high opportunity services segments like business process management, automation and data analytics. The company has many Fortune 500 enterprises as clients, which provides decent revenue visibility over the medium-to-long term.

We continue to remain positive and retain our BUY rating on the stock Target Price and Valuation: We value eClerx at | 3,000 i.e. 20x P/E on FY24E EPS Key triggers for future price performance: Traction in customer care, RPA, analytics & content development, cross sell...

Q3 revenue growth at 5.9% QoQ USD beat our estimate led by a sharp increase in offshoring

The company recently acquired personiv, an outsourcing provider with over 35+ years of experience with offices in US, India and Philippines. The acquisition would leverage synergies in digital and customer experience...

Q2 revenue grew 7.1% QoQ USD, delivering a strong beat. EBIT margin missed our estimate but outperformed consensus expectations

Q1 revenue growth at 1.4% QoQ USD, roughly in line with our estimate of 1.7% QoQ USD

Monthly Chartbook: India on path to recovery. eClerx Services: Upbeat FY22 outlook; upgrade to BUY

The company reported healthy growth in the quarter mainly led by lower roll offs, acquisition, healthy demand in analytics in customer & financial operations and improving demand from large clients. eClerx is seeing healthy growth in financial operations and offshore digital care business in top 10 clients. In addition, the company may benefit from cross sell and up sell to Personiv clients. Hence, although we expect certain short-term projects to get ramped down in the near term, we believe improving growth in CLX business, healthy deal wins, acquisition of Personiv and growth in...