IT Stock Gets Buy Call, ICICI Direct Sees Strong Growth, Declared Buyback At Rs 1900/Share

ICICI Direct has given buy call to IT Enabled Services sector stock, eClerx Services Ltd with a target price of Rs 1640 apiece. The current market price of eClerx Services is Rs 1410 apiece. Buy eClerx Services shares today at current market price to receive 16% return. Check vital points below:

1. eClerx Services Ltd Stock Outlook

The last trading price of the stock is Rs 1410 apiece with 52-week high at Rs 1980 apiece and 52-week low at Rs 1223 apiece, respectively. The stock has given multibagger returns. In last 3-years, it has given return of 321% and in last 5-years, the return is 61%. It has declined 8% in last 1-year.

2. eClerx Services Q2 FY23 Result

eClerx reported strong Q2FY23 results. Revenues increased 4.6% QoQ in CC terms. EBITDA margin increased ~92 bps QoQ to 30.1%. .The company announced buyback at Rs 1900 per share.

The board of directors of the company said in the BSE filing regarding buyback, "This is to inform you that a Meeting of Board of Directors of the Company will be held on Thursday, November 10, 2022 inter-alia: to consider and approve, the proposal for buy back of its fully paid up equity shares of the Company and other related matters."

3. Key Triggers For Future Price Performance

Traction in customer care, RPA, analytics & content development, cross sell and up sell to Personiv clients to drive growth. Lower roll-offs, improving deal wins and revival in growth are expected to drive revenues. Expect dollar revenues to grow at 12.9% CAGR in FY22-25E. 

4. Valuation

eClerx' share price has grown by ~1.6x (adjusted bonus) over the past five years (from ~Rs 857 in November 2017 to ~Rs 1400 levels in August 2022). We maintain BUY rating on the stock. According to ICICI Direct, "We value eClerx at Rs 1,640 i.e. 14x P/E on FY25E EPS."

5. About eClerx Services

eClerx Services (eClerx) provides business process management, automation and analytics services. It caters to financial services, communications, retail, media, manufacturing, travel and technology companies.

Disclaimer

The stock has been picked from the brokerage report of ICICI Direct. Greynium Information Technologies, the Author, and the respective Brokerage House are not liable for any losses caused as a result of decisions based on the article. Goodreturns.in advises users to check with certified experts before taking any investment decision.