Eclerx Services Q4 Results Review - Key Structural Shifts Augur Well For Growth Sustainability: Dolat Capital

Dolat Capital Report

Eclerx Ltd.’s Q4 FY24 constant currency revenue grew 1.4% QoQ (above street estimates) led by financial markets/customers operations business. Operating profit margin declined by 195 bps QoQ to 21.1% mainly due to investments in sales and delivery capabilities.

Management guided Ebitda margin band of 24%-28% for FY25 (versus 28% in FY24) and aspires to achieve double-digit growth in FY25. Strategies are mainly focused on getting top quadrant growth and industry leading margins over FY24-28E.

We expect revenue/profit after tax compound annual growth rate of 8.5%/12.2% over FY24-26E driven by-

1. aggressive investments,

2. increasing offshore revenue share and

3. ramping up automation through GenAI solutions which will yield long-term benefits.

Accordingly, we resume coverage on eClerx with ‘Accumulate’ rating and target price of Rs 2,640 valuing at 20 times FY26E (implies two times on PEG basis).

Click on the attachment to read the full report:

DISCLAIMER

This report is authored by an external party. NDTV Profit does not vouch for the accuracy of its contents nor is responsible for them in any way. The contents of this section do not constitute investment advice. For that you must always consult an expert based on your individual needs. The views expressed in the report are that of the author entity and do not represent the views of NDTV Profit.

Users have no license to copy, modify, or distribute the content without permission of the Original Owner.