Mehabe score: 3 G Factor: 2 Piotski Score: 5 The stock has a rating OBSERVE & HOLD. The mehabe team score is reflective of its fundamental and technical merits. A rating above 8 is considered good buy. The stock has a G-Factor of 2 and Piotski score of 5.
Description
eClerx Services provides critical business operations services to global Fortune 500 clients, including several of the worlds leading companies across financial services, cable and telecommunications, retail, fashion, media & entertainment, manufacturing, travel and leisure, software and hightech. The Company provides innovative business process management, change management, datadriven insights, advanced analytics powered by subject matter experts and smart automation.(Source : 202003-01 Annual Report Page No:104)Site:ECLERX
Market Cap:
Rs 4,691 cr
Price:
1344.0
Trading pe:
19.6x
Book-value:
378/share
Div yield:
0.07 %
Earning yield:
8.02%
Face-value:
10.0/share
52week high:
1363.05
52week low:
390.00
Technical Analysis
Stock trades at 1344.0, above its 50dma 1184.62. It also trades above its 200dma 955.69. The stock remains bullish on techicals
The 52 week high is at 1363.05 and the 52week low is at 390.00
Price Chart
P/E Chart
Sales and Margin
Strengths
– is almost debt free.
Weakness
– The company has delivered a poor sales growth of 8.82% over past five years.
Competition
– The industry trades at a mean P/E of 32.7x. Happiest Minds trades at the industry’s max P/E of 85.25x. ECLERX trades at a P/E of 19.6x
– Industry’s mean G-Factor is 3.6 while the mean Piotski score is 9.0. ECLERX has a G-Factor of 2 and Piotski scoreof 5.
– Average 1 month return for industry is 7.9%. The max 1- month return was given by Coforge: a return of 14.0 %
Quarterly Results
Sales for period ended Mar 2021 is Rs 473.0 cr compared to Rs 351.0 cr for period ended Mar 2020, a rise of 34.8%
Operating Profits reported at Rs 153.0 cr for period ended Mar 2021 vis-vis 78.0 for period ended Mar 2020 .
Operating Margins expanded 1012.5 bps for period ended Mar 2021 vis-vis Mar 2020 .
The EPS for Mar 2021 was Rs 28.3 compared to Rs 20.36 for previous quarter ended Dec 2020 and Rs 14.98 for Mar 2020
Profit & Loss Statement
Profit&Loss Comments
Company reported sales of Rs 1564.0 cr for period ended Mar 2021 vis-vis sales of Rs 1438.0 cr for the period ended Mar 2020, a growth of 8.1%. The 3 year sales cagr stood at 4.6%.
Operating margins expanded to 29.0% for period ended Mar 2021 vis-vis 23.0% for period ended Mar 2020, expansion of 600.0 bps.
Net Profit reported at Rs 283.0 cr for period ended Mar 2021 vis-vis sales of Rs 209.0 cr for the period ended Mar 2020, rising 26.1%.
Company reported a poor Net Profit CAGR of -0.8% over the last 3 years
Balance Sheet Statement
Cash Flow Statement
Cash Flow comments
Sales Growth
Profit Growth Statement
Profit Growth Statement
Stock Price CAGR
Return of Equity
General Comments
– The company has worsened on its Return on Equity (RoE) metric. The RoE on Last Year basis was 14.0% compared to 18.0% over the last 3 Years. – The stock has given a return of 230% on a 1 Year basis vis-vis a return of 2% over the last 3 Years. – The compounded sales growth on a TTM bassis is -1% vis-vis a compounded sales growth of 3% over the last 3 Years. – The compounded profit growth on a TTM basis is 12% vis-vis a compounded profit growth of -16% over the last 3 Years.
Ratios
Shareholding Pattern
– FII shareholding has remained largely constant. The Mar 2021 fii holding stood at 18.86% vis-vis 18.56% for Dec 2020 – Public shareholding has remained largely constant. The Mar 2021 public holding stood at 9.67% vis-vis 11.41% for Dec 2020
Conclusion
– is almost debt free. – The company has delivered a poor sales growth of 8.82% over past five years.
Fundamentally, the stock remains weak on business fundamentals. Weak near term results have dampened and questioned business drivers. We suggest to wait for a upturn in business performance.
Technically, the stock trades above its 50 DMA 1184.62 and is trading at 1344.0 It has shown near term bullish momentum contrary to business fundamentals. We suggest to observe price action. However as investors, who like to avoid timing the markets, we suggest to avoid the stock
