Buy eClerx Services, target price Rs 1640: ICICI Direct

ICICI Direct has buy call on eClerx Services with a target price of Rs 1640. The current market price of eClerx Services Ltd. is Rs 1617.35. Time period given by analyst is one year when eClerx Services Ltd. price can reach defined target.

eClerx Services Ltd., incorporated in the year 2000, is a Small Cap company (having a market cap of Rs 4690.38 Crore) operating in IT Enabled Services sector.

Financials
For the quarter ended 31-03-2021, the company reported a Consolidated Total Income of Rs 479.23 Crore, up 18.84 % from last quarter Total Income of Rs 403.24 Crore and up 30.34 % from last year same quarter Total Income of Rs 367.69 Crore. Company reported net profit after tax of Rs 98.39 Crore in latest quarter.

Investment Rationale
The company is witnessing improving growth in customer care, RPA, analytics and content development. In addition, eClerx could benefit from cross sell and up sell to Personiv clients. This, coupled with lower roll offs from one off client specific event, improving deal wins and revival in growth are expected to drive revenues. With this, coupled with higher revenues & margin assumption, the brokerage revises EPS estimates upwards. This, along with reasonable valuations, healthy balance sheet prompt the brokerage to maintain BUY rating on the stock with a revised target price of Rs 1,640 (15x PE on FY23E EPS, earlier target price Rs 1,150).

(Views and recommendations given in this section are the analysts' own and do not represent those of ETMarkets.com. Please consult your financial adviser before taking any position in the stock/s mentioned.)