Q3FY21 Company Update - eClerx Services - ICICI Direct

eClerx Services reported healthy Q3FY21 revenues, up 9.5% QoQ (in constant currency terms) and 9.9% QoQ in reported terms mainly led by growth in North America (up 9.9% QoQ) and Europe (up 9.9% QoQ). EBIT margins improved 20 bps to 24.7% mainly led by lower G&A expenses partially offset by higher selling & distribution expenses. Net profit increased 16.5% QoQ to Rs. 71 crore.

Valuation & Outlook

Anticipated lower roll offs from one off client specific event, improving deal wins, cross sell opportunity with acquired Personiv, traction in digital and CLX revenues are expected to drive revenues. With this, coupled with higher margin assumption (compared to our previous estimates), we revise our EPS estimates upwards. This coupled with reasonable valuation, healthy balance sheet & the company's aspiration to reach industry level growth prompt us to maintain BUY rating on the stock with a revised target price of Rs. 1150 (13x PE on FY23E EPS) (earlier target price of Rs. 830).

For details, click on the link below: https://www.icicidirect.com/mailimages/IDirect_eClerx_CoUpdate_Feb21.pdf

Shares of ECLERX SERVICES LTD. was last trading in BSE at Rs.984.4 as compared to the previous close of Rs. 977.5. The total number of shares traded during the day was 3650 in over 361 trades.

The stock hit an intraday high of Rs. 1008 and intraday low of 966.9. The net turnover during the day was Rs. 3594047.

Source : Equity Bulls

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