Buy eClerx Services; target of Rs 1675: Emkay Global Financial

Emkay Global Financial is bullish on eClerx Services has recommended buy rating on the stock with a target price of Rs 1675 in its research report dated March 22, 2023.

Broker Research

March 23, 2023 / 12:22 IST

26 Aug, 2025 12:21

Volume

Todays L/H

Emkay Global Financial's research report on eClerx Services

The company is witnessing a delay in deal renewal, only partial deal renewals, slower decision-making and budget-cut in select clients. Mgmt remains watchful of the macro conditions and expects muted growth in the near term, with hope of recovery in H2CY23. Company has no direct exposure to troubled US regional banks and its exposure to overall US regional banks remains limited. However, eClerx remains exposed to large global banks as well as to investment banks. Management expects adjusted EBITDAM (including other income) to remain at the lower half of the guided range of 28-32% for FY23. Company currently operates at 45-50% WFO and expects no material margin impact, with SEZ rules being relaxed till end-CY23. Near-term revenue growth is likely to be muted amid macro uncertainties and weakness in Digital. Client concentration and potential roll-offs remain risks; however, growth challenges would be short-lived, as medium-term demand drivers remain intact. We have rolled forward our TP to Mar-25E EPS and raised our FY23E-25E EPS by 1.6%-6%, factoring-in the 9MFY23 performance and increasing the INR/USD assumption to 79.9 vs 78.0 for FY23.

Outlook

We maintain BUY on the stock, with a TP of Rs1,675/share (earlier Rs1,550) at 14x Mar-25E EPS, considering reasonable valuations.

For all recommendations report, click here