Buy eClerx Services; target of Rs 815: Firstcall Research

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Buy eClerx Services; target of Rs 815: Firstcall Research

Firstcall Research is bullish on eClerx Services and has recommended buy rating on the stock with a target of Rs 815 in its February 13, 2012 research report.

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Firstcall Research is bullish on eClerx Services and has recommended buy rating on the stock with a target of Rs 815 in its February 13, 2012 research report.

"The company was incorporated in year 2000; it provides data analytics and customized process solutions to global enterprise clients from its offshore delivery centers in India. The portfolio of services comprises data analytics, operations management, data audits, metrics management and reporting services. It provides service solutions using a mix of custom designed data processes, delivery teams comprising generalists and domain specialists, and in-house software to automate processes. It currently offers services to clients in the financial services, and retail and manufacturing industries. The eClerx off-shore facilities meet the exacting standards expected by its global clients. It has 1950+ person deployment facilities and have excellent technology infrastructure as double redundant internet connectivity with dedicated highbandwidth links, continuous data mirroring and back up, power back-up facilities and dedicated technical support. Its facilities are based in Fort, Sewri and Ghatkopar, Mumbai and Hinjewadi - Pune."

"Eclerx services Ltd disclosed results for the quarter ended Dec 2011. Net sales for the quarter moved up 51% to Rs.1319.73 million as compared to Rs.872.00 million during the corresponding quarter last year. During the quarter, the company has reported Net Profit increased to Rs.499.48 million from Rs.359.82 million in previous year same quarter. The Basic EPS of the company stood at Rs.17.21 for the quarter ended Dec 2011."

"At the current market price of Rs.715.00, the stock is trading at 11.37 x FY12E and 9.52 x FY13E respectively. Price to Book Value of the stock is expected to be at 4.93 x and 3.25 x respectively for FY12E and FY13E. Earning per share (EPS) of the company for the earnings for FY12E and FY13E is seen at Rs.62.90 and Rs.75.08 respectively. Net Sales and PAT of the company are expected to grow at a CAGR of 31% and 44% over 2010 to 2013E respectively. During` the quarter ended, the robust growth of Net Profit is increased by 39% to Rs. 499.48 million. eClerx named "Emerging IT company in India of the Year" in Bloomberg CXO Awards 2011. On the basis of EV/EBITDA, the stock trades at 8.62 x for FY12E and 7.21 x for FY13E. We expect that the company will keep its growth story in the coming quarters also. We recommend 'BUY' in this particular scrip with a target price of Rs 815 for medium to long term investment," says Firstcall Research report.

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To read the full report click on the attachment