ECLERX - Fundamental Analysis: Financial Health & Valuation
Back to ListFundamental Rating: 4.1
| Stock Code | ECLERX | Market Cap | 22,062 Cr. | Current Price | 4,620 ₹ | High / Low | 4,986 ₹ |
| Stock P/E | 55.9 | Book Value | 307 ₹ | Dividend Yield | 0.02 % | ROCE | 28.8 % |
| ROE | 23.6 % | Face Value | 10.0 ₹ | DMA 50 | 4,578 ₹ | DMA 200 | 4,034 ₹ |
| Chg in FII Hold | 0.49 % | Chg in DII Hold | -1.19 % | PAT Qtr | 110 Cr. | PAT Prev Qtr | 92.9 Cr. |
| RSI | 49.5 | MACD | 12.6 | Volume | 52,154 | Avg Vol 1Wk | 41,725 |
| Low price | 2,116 ₹ | High price | 4,986 ₹ | PEG Ratio | -52.3 | Debt to equity | 0.18 |
| 52w Index | 87.2 % | Qtr Profit Var | 12.8 % | EPS | 82.8 ₹ | Industry PE | 35.9 |
📊 Financials: eClerx Services shows strong fundamentals with ROCE at 28.8% and ROE at 23.6%, reflecting efficient capital usage. EPS stands at ₹82.8, supported by consistent profitability. Debt-to-equity ratio of 0.18 indicates low leverage, ensuring financial stability. Quarterly PAT improved from ₹92.9 Cr. to ₹110 Cr. (+12.8%), highlighting earnings growth momentum. Dividend yield of 0.02% is minimal, offering limited income support.
💰 Valuation: Current P/E of 55.9 is significantly higher than industry average (35.9), suggesting overvaluation. P/B ratio ~15.0 (4620/307) is elevated, reflecting premium pricing. PEG ratio of -52.3 indicates weak growth outlook relative to valuation. Intrinsic value appears lower than CMP, requiring cautious entry despite strong fundamentals.
🏢 Business Model & Advantage: eClerx operates in IT-enabled services, analytics, and process outsourcing, with strong global client base. Competitive advantage lies in niche expertise, automation-driven solutions, and diversified service offerings across financial services, retail, and digital operations. Market cap of ₹22,062 Cr. places it in mid-cap space, offering growth potential with sector resilience.
📈 Entry Zone: Technically, RSI at 49.5 indicates neutral momentum, while MACD (12.6) shows mild bullishness. Current price (₹4,620) is near 50 DMA (₹4,578) and above 200 DMA (₹4,034). A good entry zone would be between ₹4,400–4,550 for margin of safety.
🕰️ Long-term Holding: Strong fundamentals, low debt, and sector demand make eClerx suitable for long-term holding. However, stretched valuations require staggered accumulation during dips rather than aggressive entry.
Positive
- ✅ Strong ROCE (28.8%) and ROE (23.6%)
- ✅ EPS of ₹82.8 supports profitability
- ✅ Low debt-to-equity ratio (0.18)
- ✅ Quarterly PAT growth (+12.8%) highlights earnings momentum
Limitation
- ⚠️ High P/E (55.9) vs. industry average (35.9)
- ⚠️ Elevated P/B ratio (~15.0)
- ⚠️ PEG ratio (-52.3) indicates weak growth outlook
- ⚠️ Dividend yield at 0.02% offers minimal income support
Company Negative News
- 📉 Decline in DII holdings (-1.19%)
Company Positive News
- 📈 Increase in FII holdings (+0.49%)
- 📈 Quarterly PAT improved from ₹92.9 Cr. to ₹110 Cr.
Industry
- 🏭 Industry P/E at 35.9 reflects moderate sector valuation
- 🏭 eClerx trades at a premium, reflecting investor confidence in niche expertise
Conclusion
🔎 eClerx demonstrates strong fundamentals with high return ratios, low debt, and consistent profitability. However, valuations are stretched relative to industry peers, and dividend yield is minimal. Best strategy: accumulate cautiously near ₹4,400–4,550 for long-term holding, with staggered entry to manage valuation risk.
Would you like me to extend this with a peer benchmarking overlay against other IT-enabled service companies, so you can see how eClerx compares in ROE, ROCE, and valuation multiples?